Barclays on U.S. Specialty Pharmaceuticals: Mylan Influencing Lipitor Landscape?
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Rating Summary:
17 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 12 | New: 19
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Barclays on U.S. Specialty Pharmaceuticals: Mylan Influencing Lipitor Landscape?
Barclays analyst says, "Successful lawsuit could translate to earlier and possibly greater generic competition, though we see this as unlikely: After market close on Friday 3/18, Mylan (NYSE: MYL) filed a lawsuit against the FDA regarding the agency's review of Ranbaxy's generic Lipitor application. If the lawsuit is successful, this could translate to Ranbaxy not gaining approval, but more importantly, losing its 180-day generic exclusivity for generic Lipitor. This, in turn, might also lead to Mylan (and possibly Teva (Nasdaq: TEVA), entering the market with their generic versions as early as 6/28/10, when Lipitor's pediatric exclusivity expires, vs consensus forecast for additional competition in 2012. Unclear would be the impact to Watson, given that it is expected to enter the market on 11/30/11 with Pfizer-supplied (NYSE: PFE) product, according to the terms its patent litigation settlement agreement. Recall, our FY11 Watson EPS estimate of $4.07 assumes that Watson (NYSE: WPI) launches generic Lipitor on 11/30, with only competition from Ranbaxy, although Street expectations have recently begun to partly assume some delay for Ranbaxy."
"The big question is whether FDA will make an exception to the rule: Handicapping the likelihood of the FDA not allowing Ranbaxy to retain its 180-day exclusivity is challenging. That said, we see it as unlikely, since it would mean that the agency would be failing to follow the law. In addition, without knowing whether Ranbaxy is making sufficient progress toward gaining FDA approval of its application, it is difficult to say whether Mylan's arguments - citing the FDA's Feb 2009 letter and the AIP - are sufficient for the FDA to make a decision on Ranbaxy's application soon. We believe that the agency will allow Ranbaxy to continue making efforts to gain approval, for the foreseeable future."
Barclays analyst says, "Successful lawsuit could translate to earlier and possibly greater generic competition, though we see this as unlikely: After market close on Friday 3/18, Mylan (NYSE: MYL) filed a lawsuit against the FDA regarding the agency's review of Ranbaxy's generic Lipitor application. If the lawsuit is successful, this could translate to Ranbaxy not gaining approval, but more importantly, losing its 180-day generic exclusivity for generic Lipitor. This, in turn, might also lead to Mylan (and possibly Teva (Nasdaq: TEVA), entering the market with their generic versions as early as 6/28/10, when Lipitor's pediatric exclusivity expires, vs consensus forecast for additional competition in 2012. Unclear would be the impact to Watson, given that it is expected to enter the market on 11/30/11 with Pfizer-supplied (NYSE: PFE) product, according to the terms its patent litigation settlement agreement. Recall, our FY11 Watson EPS estimate of $4.07 assumes that Watson (NYSE: WPI) launches generic Lipitor on 11/30, with only competition from Ranbaxy, although Street expectations have recently begun to partly assume some delay for Ranbaxy."
"The big question is whether FDA will make an exception to the rule: Handicapping the likelihood of the FDA not allowing Ranbaxy to retain its 180-day exclusivity is challenging. That said, we see it as unlikely, since it would mean that the agency would be failing to follow the law. In addition, without knowing whether Ranbaxy is making sufficient progress toward gaining FDA approval of its application, it is difficult to say whether Mylan's arguments - citing the FDA's Feb 2009 letter and the AIP - are sufficient for the FDA to make a decision on Ranbaxy's application soon. We believe that the agency will allow Ranbaxy to continue making efforts to gain approval, for the foreseeable future."
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