Re: KOSP This article "confirms" a rumor or that BRL is telling people it will launch early.
Kos sinks on rival drug fears
By Val Brickates Kennedy, CBS.MarketWatch.com
Last Update: 4:55 PM ET Dec. 9, 2004
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BOSTON (CBS.MW) -- Kos Pharmaceuticals' shares fell over 13 percent on Thursday amid concerns that rival Barr Laboratories may launch a generic version of Kos' lead drug, the cholesterol treatment Niaspan, at a much earlier date than expected.
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Kos (KOSP: news, chart, profile) shares closed down 13.12 percent at $35.82, as Barr's stock gained 2.14 percent to $42.96.
SG Cowen analyst Ian Sanderson confirmed the Kos sell-off was fueled by rumors that Barr (BRL: news, chart, profile) has told clients it intends to launch a generic version of Niaspan as early as the first half of 2005.
Kos has been embroiled in a patent battle with Barr over that company's intention to launch a generic version of Niaspan. A patent trial is scheduled to begin in February 2006.
However, the law also allows Barr to launch a generic version of the drug before the case is settled, on the understanding that if it loses its court challenge, it will be compelled to pay damages to Kos. Such launches are called "at-risk launches" by the industry.
"I think investors are surprised to hear Barr so openly admit that it would launch at-risk," said Sanderson.
Niaspan has annual sales of about $200 million. The drug accounts for almost 70 percent of Kos' annual revenues.
In an effort to hang onto its lucrative franchise, Kos filed for and won FDA approval for a new formulation of Niaspan. That formulation is expected to launch in late 2005, with Kos actively working to migrate patients from Niaspan and any generic competitors to its new formulation of the drug.
Kos' plan to market a reformulated version of Niaspan also puts pressure on Barr to launch earlier, even if it is riskier, noted Sanderson.
"I think there's a 60 to 70 percent chance that Barr does launch early," said Sanderson. "They don't want to see this market go away due to a reformulated Niaspan." |
