Shire, Prasco Ink Deal - Analyst Blog
January 16 2012 - 11:43AM
Zacks
Shire (SHPGY) recently entered into an
agreement with Prasco Laboratories, a US based privately held
generics company. The agreement grants Prasco the US distribution
rights to the authorized generic version of Carbatrol
(carbamazepine) extended-release capsules in various strengths (100
mg, 200 mg and 300 mg). Detailed terms of the agreement were not
provided.
Carbatrol is an anticonvulsant drug for several types of
seizures including partial, tonic-clonic, mixed and several types
of nerve pain including trigeminal and glossopharyngeal neuralgia.
Carbatrol generated revenues of $45.6 million in the first nine
months of 2011, representing 1.46% of Shire’s total revenues.
Generic Threats
Shire is facing generic threats for several of its key marketed
products. The company is already facing generic competition for
Adderall XR, one of its top revenue-generating products.
Teva Pharmaceutical Industries, Ltd. (TEVA) and
Impax Laboratories, Inc. (IPXL) had launched
generic versions of Adderall XR in April 2009 and October 2009,
respectively.
Following the entry of generic competition, Adderall XR sales
have nose-dived. Sales fell from $1,101.7 million in 2008 to $626.5
million in 2009. 2010 sales came in at $360.8 million.
Watson Laboratories, Inc. (WPI) has also filed an
abbreviated new drug application (“ANDA”), which is currently under
litigation.
Vyvanse, currently the top revenue grosser at Shire, is also
facing patent challenges. Six companies, including Sandoz, Inc.,
Amneal Pharmaceuticals LLC, Watson Laboratories, Roxane
Laboratories, Inc., Mylan Pharmaceuticals, Inc.
(MYL) and Actavis Elizabeth LLC and Actavis Inc. (both together)
have filed ANDAs for their generic versions of Vyvanse. Shire has
filed patent infringement lawsuits against all these companies.
Shire is currently fighting patent infringement lawsuits for
several of its other products as well including Intuniv, Fosrenol
and Lialda.
Our Recommendation
We currently have a Neutral recommendation on Shire. The stock
carries a Zacks #3 Rank (Hold rating) in the short run.
Shire’s Movetis and Advanced BioHealing Inc. acquisitions have
added immense potential to its pipeline. However, with several of
its products already facing or likely to face generic competition,
the company’s pipeline needs to deliver.
IMPAX LABORATRS (IPXL): Free Stock Analysis Report
MYLAN INC (MYL): Free Stock Analysis Report
SHIRE PLC-ADR (SHPGY): Free Stock Analysis Report
TEVA PHARM ADR (TEVA): Free Stock Analysis Report
WATSON PHARMA (WPI): Free Stock Analysis Report
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