Here’s A Blow To AstraZeneca’s Drug Portfolio
AstraZeneca (NYSE:AZN) has traveled a bumpy road in recent months after facing sharp declines in revenue as patents on top-selling drugs — including the cholesterol treatment Crestor and its antipsychotic medicine Seroquel — expire. And the pharmaceutical manufacturer’s patent problems keep mounting. A United States District Court in New Jersey ruled Tuesday that the patent protecting the Anglo-Swedish company’s asthma drug Pulmicort Respules is invalid, according to The Wall Street Journal.
This ruling is blow to AstraZeneca’s dwindling drug portfolio, especially as it gives the company’s rival, Actavis (NYSE:ACT), the opportunity to launch a generic version of the drug. Actavis has said it plans to launch its version of the drug immediately, reported the publication.
Already, the company’s difficulties have prompted management to announce a $2.3 billion restructuring plan that led to thousands of job cuts. But new Chief Executive Pascal Soriot is searching for a new route to profitability…
Soriot is facing increasing pressure to find a new means to stimulate growth as the new generic version of Pulmicort Respules is expected to wreck havoc on sales. In addition to eating into profits, Actavis’s copy will also reduce the royalties AstraZeneca receives from the sales of a separate copy marketed by Israel’s Teva Pharmaceutical Industries (NYSE:TEVA).
After a deal was inked between the two companies in 2008, AstraZeneca allowed the drug maker to produce and sell a generic version, and this partnership generated $260 million in royalties during 2012. Pulmicort Respules pulled in $866 million for the company last year, while Actavis said that total sales of the drug — an estimate that included both branded and generic versions — came in at $1.2 billion during the year ended Jan. 31.
Fortunately for the company, the ruling does not further depress AstraZeneca’s forecasted sales growth for 2013, which already stands at a mid-to high-single-digit percentage decline.
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