Hospira (HSP) has reached an agreement with Sanofi-Aventis (SNY) to settle a patent dispute for the US sales of oxaliplatin injection, a generic version of Sanofi-Aventis’ Eloxatin.
Per the settlement, Hospira will not sell oxaliplatin injection in the US until June 30, 2010. However, the drug can be re-launched on Aug. 9, 2012.
Hospira has been involved in a patent litigation with Sanofi-Aventis for the past few months. Although Hospira received a favorable decision in August 2009, the decision was later vacated. Eloxatin, meant for the treatment of advanced colorectal cancer and stage III colon cancer patients after surgery, recorded US sales of €677 million in 2009.
Apart from Hospira, Sanofi settled its Eloxatin patent dispute with other generic manufacturers such as Teva Pharmaceuticals (TEVA), Fresenius Kabi and Sandoz, Novartis’ (NVS) generics unit.
Although Hospira will have to stop selling the drug as a result of the agreement, we note that the settlement will not affect its financial guidance for 2010. Hospira is one of the largest generic injectables company in the world with more than 50% of its total sales coming from the Specialty Injectable Pharmaceuticals (SIP) segment.
The US launch of oxaliplatin was one of the factors for the 20.3% growth (at constant exchange rates to $1.6 billion) of the SIP segment in the Americas in 2009. Hospira witnessed strong demand for oxaliplatin as it was the first company to launch the generic version of the drug.
Hospira has launched several new products in the past few months, which has enabled the company to record robust growth in revenues. It launched six high dosage formulations of therapeutic heparin in single and multi-dose vials.
In addition, Hospira plans to launch the generic version of docetaxel, a major drug used to treat various forms of cancers by the end of 2010. The drug recorded 2009 branded sales of €928 million in Europe . We are currently Neutral on the stock.
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