Relief for Warner Chilcott - Analyst Blog
September 30 2011 - 9:30AM
Zacks
Recently, Warner
Chilcott (WCRX) received some encouraging news regarding
its acne drug Doryx from a US district court.
The court, while passing a verdict
on Warner Chilcott’s patent dispute with generic player
Mylan Pharmaceuticals (MYL) regarding Doryx, ruled
in favor of a preliminary injunction thus preventing Mylan from
launching a generic version of the drug (150 mg). The court came to
the conclusion that Mylan infringed Warner Chilcott's patent (161)
engulfing Doryx products. Mylan cannot launch the generic
equivalent until the district court makes a final decision
regarding the disputed patent. However, the court has not assigned
any date for the trial.
We remind investors that Warner
Chilcott received a paragraph IV patent certification notice from
Mylan in March 2009. The notice informed Warner Chilcott that Mylan
had filed an abbreviated new drug application (ANDA) with the US
Food and Drug Administration (FDA) seeking approval to manufacture
and market a generic version of Doryx, 150 mg. The paragraph IV
certification implies that the filer believes the relevant patent
to be invalid or will not be infringed by the generic version of
the drug. Warner Chilcott challenged the application in May
2009.
Warner Chilcott is entangled in
dispute regarding the Doryx products with other companies also such
as Novartis (NVS) and Impax
Laboratories (IPXL). We note that Doryx, 150 mg, accounts
for bulk of the revenues generated from the Doryx line of products
at Warner Chilcott. Consequently, the relief provided by the court
verdict is very much welcome for Warner Chilcott.
Our
Recommendation
We currently have a Neutral
recommendation on Warner Chilcott in the long-run. The stock
carries a Zacks #3 Rank (Hold rating) in the short run. Although
the company is facing patent expirations for many of its key drugs,
we believe Warner Chilcott’s diversified product base will help
withstand the generic threat.
IMPAX LABORATRS (IPXL): Free Stock Analysis Report
MYLAN INC (MYL): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
WARNER CHIL PLC (WCRX): Free Stock Analysis Report
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