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AstraZeneca hit by US Pulmicort patent ruling

Federal court says patent for inhaled steroid drug is invalid

AstraZeneca AZ headquarters London UK

AstraZeneca (AZ) suffered another setback yesterday when a US federal court ruled that a patent for its inhaled steroid drug Pulmicort Respules was invalid.

The US District Court for the District of New Jersey issued a double whammy to AZ after ruling that one patent (No. 6,598,603) was invalid while concluding that the generic drugmakers defending the litigation were not infringing a second (No. 7,524,834).

AZ's executive vice president, North America Paul Hudson said the pharma company "strongly disagrees with the court's decision" and is likely to appeal.

The case was brought against several generic drugmakers, including Apotex and Watson (now Actavis) and partner Breathe Ltd, who have already been granted FDA approval for generics. Actavis said it would move immediately ahead with the launch of a generic version of the drug.

If upheld, the decision will cut more than five years from the exclusivity period for Pulmicort Respules (budesonide), which is due to expire in the US in 2018 with a paediatric extension until 2019. The drug is indicated as a maintenance treatment for asthma in children aged 12 months to 8 years.

Sales of AZ's Pulmicort range were $866m last year worldwide and $233m in the US, with a little more than half of US turnover ($136m) coming from the Pulmicort Respules inhalation solution and the remainder from AZ's Pulmicort Turbuhaler dry powder inhaler (DPI) formulation.

AZ also received a royalty stream of around $260m last year from Teva, which sells an authorised generic Pulmicort Respules product in the US that would also be dramatically affected by the entry of generic rivals.  Teva said in February that competition to Pulmicort could result in its 2013 revenue expectations coming in at the lower end of its $4.3bn-$4.7bn range.

"We thought AstraZeneca had managed to keep the 'wolf from the door' following its 2008 settlement with Teva on Pulmicort Respules, which we had assumed would have protected the franchise to 2019," said Panmure Gordon analyst Savvas Neophytou.

"The company's prospects now strongly pivot on its pipeline once again following the March strategy review," he added, sounding a note of caution by commenting "the company's recent track record in phase III trials remains relatively poor."

3rd April 2013

From: Sales, Regulatory

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