In the Wait of Patent Expirations
June 09 2010 - 8:53AM
Marketwired
www.rothmanresearch.com - The biggest nightmare for pharmaceuticals
is when their drug patent expires. Patent expiration is daunting
for any branded pharmaceutical as it leaves the door wide open for
generic versions of the company's drug which have a direct impact
on the revenue stream this drug brings to the patented drug
manufacturer. Branded drug production normally involves huge
investments in Research and Development (R&D) from companies
like
Eli Lilly & Co. (NYSE: LLY) and the
success of the drugs is very often a gamble. However, a successful
propriety drug which meets all of the FDA's criteria can be a
virtual gold mine for the company. An example is Eli Lilly's
best-selling drug Zyprexa, used in the treatment of Schizophrenia
and other psychological disorders, which contributed to about 23%
of the company's sales in 2009 and which will expire in 2011.
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"Eli Lilly is facing some mind-boggling strategic issues with at
least 5 of its best-sellers lining for the shoot as they near
patent expiration starting at the close of 2011 up to 2017. The
company will be losing a massive portion of its revenue stream to
patent expiration," commented Jack Benassi of
www.rothmanresearch.com. "Eli Lilly has made some crucial maneuvers
to cut cost like the trimming of 5,500 positions in 2009 and its
acquisition of ImClone which increased its product pipeline with
promising drugs like Erbitux for colon cancer treatment. M&A
has been a growing trend in the pharma circle in a bid to cushion
patent expiration impacts on revenue through addition of new
products. Some industry experts, however, believe that Eli Lilly
paid too much for ImClone at a price of $6.5 billion."
*Free downloadable research report on Eli Lilly
& Co. is available by signing up now at
http://www.rothmanresearch.com/article/lly/23568/Jun-09-2010.html
Eli Lilly is planning to continue its workforce reduction up to
the end of 2011 so as to minimize the financial challenges it will
face from generic competition in the mid-term. The generic drugs
space has been booming in recent years with an increase of 5.9% in
the use of generic drugs in 2009. Overall generic products totaled
about $74 billion in sales last year. Whilst the generic drugs
sphere is dominated by a few key players like Teva and Dr. Reddy's,
some intrepid contenders are starting to build momentum. One such
company is Impax Laboratories (NASDAQ: IPXL)
which is forging its way through the generic drugs industry with a
number of hot potential products in the pipeline. The company has
successfully been able to take advantage of off-patent drugs and
has several joint ventures with a number of large generics
companies including Teva. Many pharma experts believe the company
is set to grow in 2010 and 2011 as it has a good balance sheet and
interesting pipeline.
*Complimentary downloadable research on Impax
Laboratories Inc. is accessible upon registration at
http://www.rothmanresearch.com/article/ipxl/23569/Jun-09-2010.html
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