Par Pharmaceutical Companies Inc. (PRX) recently entered into an agreement with Handa Pharmaceuticals, according to which Par Pharma acquired the abbreviated new drug application (ANDA) for generic Dexilant from Handa Pharma. However, the ANDA is yet to receive final approval from the US Food and Drug Administration (FDA).

Under the terms of the agreement, Par Pharma acquired the rights to market, sell and distribute the generic drug in the US and will receive a percentage of profits from the sales of the product.

We note that Handa Pharma is currently involved in a patent infringement lawsuit in the US District Court for the District of Northern California, in relation to its generic version of Dexilant. As a part of the agreement, Par Pharma will be responsible for the ongoing litigation.

Handa Pharma believes it is the first to file an ANDA for the 60 mg formulation of the drug, which means, on regulatory approval, the company could enjoy 180 days of marketing exclusivity.

Dexilant is Takeda Pharmaceutical’s branded drug, marketed for the treatment of gastroesophageal reflux disease (GERD) and erosive esophagitis. US annual sales of Dexilant 60 mg amounted to $517 million, according to the IMS Health Data.

Par Pharma was in news earlier this month as well. The company announced the commencement of the shipment of a generic version of Provigil, approved for improving wakefulness in patients with excessive sleepiness associated with narcolepsy, obstructive sleep apnea/hypopnea syndrome and shift work sleep disorder.

The company has 180-day marketing exclusivity for generic Provigil.

Par Pharma had acquired the US rights to market generic Provigil from Teva Pharmaceutical Industries Ltd.‘s (TEVA) in October 2011, following Teva’s acquisition of Cephalon. Apart from the US rights to generic Provigil, Par Pharma had also acquired the ANDAs for Actiq and Amrix from Teva.

Our Take

We currently have a Neutral recommendation on Par Pharma. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We believe that these products are significant additions to Par Pharma’s generic product portfolio.

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