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Sun Pharma's Effexor copy could damage Wyeth

Wyeth's best-selling drug, the antidepressant Effexor, is under threat from Sun Pharmaceutical's own generic extended-release version of the drug in the US

Wyeth's best-selling drug, the antidepressant Effexor (venlafaxine), is under threat from India-headquartered Sun Pharmaceutical's own generic extended-release version of the drug in the US.

Sun has applied for FDA approval to sell a drug with the same active ingredient as Effexor, but in an extended-release tablet form instead of a capsule, thus avoiding patent battles.

Wyeth is the exclusive marketer of Effexor in the US until July 2010, achieved by its successful 2005 patent lawsuit. The commonest version of venlafaxine is the extended-release capsule, Effexor XR.

The FDA approval of Sun's version could come as soon as patent protection for venlafaxine runs out in June 2008, while the patent for the extended-release capsule form will expire later.

Sun's different formulation should allow it to wriggle out of Wyeth's patent strictures. Wyeth has already told Sun it will not litigate for patent infringement, while patent experts say the company has no chance of successful litigation anyway.

Deutsche Bank analysts say that Wyeth will be over-exposed to generic competition between now and 2010, especially the company's two major drugs, Protonix (pantoprazole) and Effexor.

Bank of America analysts say that Sun's Effexor XR copy could wrest between 10 and 15 per cent of market share for the drug, or a loss of over USD 500m in annual sales for Wyeth.

According to the Associated Press (AP), Wyeth's stock activity is mirroring analyst concerns. Company shares have dropped 25 per cent since hitting a five-year high of USD 62.20 in June 2007, closing at USD 46.36 on 19 December.

Wyeth says it is unconcerned by Sun's generic challenge, as it is unlikely to be certified by the FDA as an exact copy of Effexor XR, as it has a different formulation.
Current laws say that generics must be exact copies, including the same formulation.

Wyeth's senior vice-president, Joseph Mahady, said at an investor conference in November: "It's more than a difference of being a capsule versus a tablet. It is likely to be a very different technology. It may indeed be a very different delivery profile of the product."

In an interview with AP, Uday Baldota, Sun's vice-president of investor relations, said: "The challenge is clear. The effort on promotion and marketing will be different from what you will do on a fully substitutable generic product."

20th December 2007

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