Thursday May 31, 12:19 pm Eastern Time
Barr Labs Stock Jumps on Court Ruling
NEW YORK (Reuters) - Shares of drug maker Barr Laboratories Inc. (NYSE:BRL - news) soared on Thursday after an appeals court panel upheld a decision that would permit Barr to sell its generic version of the blockbuster antidepressant Prozac by August.
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The shares were up $4.70, or nearly 7 percent, to $72.40 in midday trade on the New York Stock Exchange.
On Wednesday, Barr said a three-judge panel of the federal appeals court in Washington had upheld an earlier decision that a patent on Prozac held by Eli Lilly and Co. (NYSE:LLY - news) was invalid. The patent could have extended Lilly's patent protection, and prevented generic competition, until December 2003.
Barr is expected to have up to six months of exclusivity as the only seller of a generic version of Prozac.
Analysts described the court decision as another nail in the coffin for Lilly's branded exclusivity of Prozac, following the original appeals court decision in August 2000.
Analysts Steven Valiquette of UBS Warburg and Elliot Wilbur of CIBC World Markets said on Wednesday the decision was likely to stand, although Lilly has said it might ask for a rehearing or petition the U.S. Supreme Court.
Wilbur estimated Barr could generate sales of about $400 million from generic Prozac for its fiscal year starting in July. Barr is expected to have total revenues of just over $500 million for the current fiscal year, according to analysts polled by Thomson Financial/First Call.
First Union Securities said in a research note that it expects Barr to generate revenues of about $270 million from a copycat Prozac in the drug's first 12 months on the market.
First Union argued that because Lilly may slow its marketing of Prozac once generic competition reaches the market, sellers of generic versions may be hurt as Prozac loses market share to other antidepressants.
``Furthermore, additional (generic) applicants stand ready to enter the market as soon as (Barr's) exclusivity expires,'' First Union said. |
