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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: coug who wrote (9092)	9/10/2003 2:15:16 PM
From: keokalani'nui	Respond to of 52153

Emboldened generic drugmakers jumping legal guns Tuesday September 9, 2:42 pm ET By Jed Seltzer NEW YORK, Sept 9 (Reuters) - Generic drug companies, taking advantage of growing unrest over rising health care costs and emboldened by recent court victories, are launching copycat drugs before related legal cases are completely resolved. ADVERTISEMENT Apotex on Monday evening said it will launch a generic version of GlaxoSmithKline Plc's (London:GSK.L - News) antidepressant Paxil, one of the world's top-selling drugs with more than $3 billion in annual sales, even before a trial in Philadelphia begins on two of Glaxo's patents. One by one, major drugmakers are losing exclusivity over their top drugs. More than $30 billion in annual U.S. sales of branded drugs are up for grabs from 2002 through 2006, further pressuring the big pharmaceutical companies to devise novel new medicines. Generic drug companies, trying to get a slice of the pie coming off-patent, are increasingly willing to launch even though they risk being sued for damages by the deep-pocketed large drugmakers. "Generic drugs are becoming a real important part of the pharmaceutical industry," said analyst Albert Rauch of A.G. Edwards. "And for the most part, you won't see any generics wait for appeals" if they win their original cases. Geneva Pharmaceuticals, a unit of Novartis AG (NOVZn.VX), launched a copy of GSK's antibiotic Augmentin in July 2002 and Mylan Laboratories Inc. (NYSE:MYL - News) marketed a generic version of AstraZeneca Plc's (London:AZN.L - News) Prilosec (News - Websites)last month -- both before final appeals court decisions were determined. A landmark decision in 2000 gave Barr Laboratories Inc. (NYSE:BRL - News) the right to market a copy of Eli Lilly and Co's (NYSE:LLY - News) Prozac antidepressant, setting the stage for an expected decade of sparring between generic drugmakers and branded companies. RISK OF TREBLE DAMAGES If generics launch before a lower court case is even heard, they risk having to pay treble damages on sales lost by the branded drugmaker, but if they launch before an appeals court ruling, they face only single damages -- making it worth the risk, some analysts said. "The world has changed. Generics are more and more likely to launch before there is a full court ruling, if they feel confident enough," said Max Hermann, an analyst with ING. Generic drug companies have been winning about 75 percent of recent litigation, said Rauch, giving them more confidence. Also encouraging a climate favoring cheaper generic drugs is a 13 percent annual rise in prescription drug prices at a time when the U.S. government has proposed to partially pay for drugs for seniors under the Medicare program. While health industry executives such as Pfizer Inc. (NYSE:PFE - News) Chief Executive Hank McKinnell repeat the refrain of maintaining strong intellectual property laws, demands for lower health care costs are becoming more dominant. And that could affect judges upcoming generics cases involving important prescription drugs. Profitable drugs that could lose U.S. exclusivity over the next few years include Johnson & Johnson's (NYSE:JNJ - News) Levaquin antibiotic and Duragesic pain patch; Ribavirin, a hepatitis drug important to the profits of ICN Pharmaceuticals Inc. (NYSE:ICN - News) and Schering-Plough Corp. (NYSE:SGP - News); GlaxoSmithKline's Wellbutrin XR antidepressant; Pfizer's Neurontin epilepsy drug; and a host of drugs made by Bristol-Myers Squibb Co. (NYSE:BMY - News) that generate billions of dollars in annual sales. The Levaquin case could prove precedent-setting because it involves patents over a single-isomer drug, or a medicine that is essentially a pared down version of an existing drug. Many branded drugs currently on the market are single-isomer drugs, so a patent loss for J&J on Levaquin could prove disastrous for big drugmakers. (Additional reporting by Ben Hirschler in London) biz.yahoo.com