Bloomberg News

AstraZeneca Loses Ruling Over Patent for Toprol-XL

July 23, 2007

AstraZeneca Plc (AZN:US) lost a court ruling that opens the door to generic competition for its blood- pressure treatment Toprol-XL.

A U.S. appeals court in Washington said today a patent on the drug is invalid because the compound is already covered by another patent. The ruling is a victory for Novartis AG (NOVN)'s Eon Labs, KV Pharmaceutical Co. (KVPHQ:US) and Watson Pharmaceuticals Inc. (WPI:US)'s Andrx unit.

``We're disappointed with the ruling on double-patenting,'' AstraZeneca spokesman Blair Hains said. ``We're reading the ruling and will evaluate what our future steps will be.''

U.S. sales of Toprol-XL contributed $331 million, or 13 cents a share, in the first quarter to London-based AstraZeneca's revenue. The company's forecast for the rest of 2007 doesn't include the drug. Lehman Brothers estimates U.S. sales of Toprol-XL will plunge to $100 million in the third quarter and to nothing in the fourth quarter because of generic competition.

A 25-milligram dose of the medicine has had generic-drug competition since November from Eon, now part of Novartis's Sandoz generic-drug unit. It also is sold as a so-called authorized generic, the brand medicine without the label.

In May, the U.S. Food and Drug Administration approved Sandoz's application to sell Toprol-XL in a 50-milligram dose. Spokeswoman Rachel Spielman said the company isn't yet selling Toprol-XL in the 50-milligram form. She declined to comment further.

Sandoz Shares Profits

In May, Watson sold Sandoz its rights to be the first to sell generic Toprol-XL in a 50-milligram dose. In return, Watson gets a share of profits from Sandoz.

The FDA also approved KV Pharmaceutical's request to sell the drug in 100-milligram and 200-milligram doses.

In today's ruling, the U.S. Court of Appeals for the Federal Circuit said in a 2-to-1 decision that one of the patents for the drug covers the same thing as a different patent that expired.

The court sent the case back to a lower court to determine whether the invalidated patent and a third patent also should be deemed unenforceable. Those deliberations, which won't block rivals from selling generic versions, might determine legal fees in the case.

AstraZeneca's American depositary receipts (AZN:US), each representing one ordinary share, fell 4 cents to $55.55 in New York Stock Exchange composite trading.

Novartis ADRs (NVS:US), each worth one ordinary share, fell 30 cents to $54.69. Shares of Watson Pharmaceuticals, based in Corona, California, rose 37 cents to $33.05. St. Louis-based KV Pharmaceutical's shares (2FA:US) fell 2 cents to $28.78.

The case is In Re Metoprolol Succinate Patent Litigation, 06-1254, U.S. Court of Appeals for the Federal Circuit (Washington).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editors responsible for this story: Patrick Oster at poster@bloomberg.net; Robert Simison at rsimison@bloomberg.net.


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Companies Mentioned

  • AZN
    (AstraZeneca PLC)
    • $74.16 USD
    • 0.90
    • 1.21%
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