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Lipitor patent upheld in Australia to prevent rival generic launch

Pfizer has revealed that the Australian Federal Court in Victoria has upheld the exclusivity of its basic patent covering atorvastatin, the active ingredient in Lipitor
Pfizer has revealed that the Australian Federal Court in Victoria has upheld the exclusivity of its basic patent covering atorvastatin, the active ingredient in Lipitor.

The ruling marked the end of a lawsuit filed in 2005 by Indian generic drug manufacturer, Ranbaxy. The final ruling included an injunction against Ranbaxy's product and preserves Lipitor's patent coverage in Australia until May 2012. Ranbaxy can still appeal against the decision.

The court found that Ranbaxy's proposed generic product would have infringed Pfizer's basic Lipitor patent (AU 601981). A second patent covering the calcium salt of atorvastatin (AU 628198), which will expire in September 2012, was ruled invalid by the court, however. Pfizer is to appeal the ruling.

In May 2006, Pfizer's shares fell 11 per cent, wiping out $21 billion of market value, after the world's biggest drug maker ended the development of its most important new treatment, a cholesterol medicine designed to replace Lipitor when its patent expires. Pfizer ended studies of the cholesterol pill torcetrapib because deaths among patients taking it were 60 per cent higher than the control group.

The failure of that trial, alongside the prospect of generic competition in 2007 for several other Pfizer products, including its hypertension drug Norvasc (amlodipine) and allergy pill Zyrtec (citirizine), have negatively impacted its shares relative to competitors.

Merrill Lynch analysts expect Lipitor sales to fall five per cent in 2007, compared with Pfizer's own growth projects.

Earlier in 2006, Israeli generics giant, Teva, and India's Ranbaxy introduced generic versions of Merck & Co's rival to Lipitor, Zocor (simvastatin). As both firms won six months market exclusivity, they could keep the price of their copies close to that of Zocor.

The FDA has approved six more generic copies of Zocor, which will push down the price of generic Zocor by around 80 per cent, compared with the branded product. Companies now selling generic Zocor include the following: Canadian generics firm, Cobalt Pharmaceuticals; the Sandoz unit of Swiss-based Novartis; and India's other generic major, Dr. Reddy's.

Pfizer is planning a marketing campaign to differentiate Lipitor from its copycat rivals. Even so, the world's number one drug company still faces competition from newer and more potent branded cholesterol medications, such as AstraZeneca's Crestor (rosuvastatin) and Vytorin, a combination of ezetimibe and simvastatin, sold by Merck and Schering-Plough.

In early December 2006, Pfizer increased its dividend 21 per cent to increase investor confidence.

4th January 2007

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