The legal tussle between Shire (SHPGY) and Watson Pharmaceuticals Inc. (WPI) intensified with the Ireland based Shire filing a case of patent infringement and breach of contract against Watson Pharma relating to Shire’s Adderall XR.
Adderall XR is indicated for treating patients suffering from attention deficit hyperactive disorder (ADHD). ADHD refers to a neurobiological disorder that is often hereditary in nature. The disease gives way to lack of attention and often results in impulsiveness and hyperactivity.
We note that Watson Pharma is seeking approval from the US Food and Drug Administration (FDA) to market generic versions of the ADHD drug in multiple doses before the drug’s market exclusivity expires in April 2019. To achieve the objective, Watson Pharma filed an abbreviated new drug application (ANDA) with the FDA earlier in the year for generic versions of 5, 10, 15, 20, 25 and 30 mg strengths of Shire’s Adderall XR.
We remind investors that in February 2011, Shire received a notification from Watson Pharma regarding a patent challenge for Adderall XR. After reviewing the paragraph IV patent certification, Shire dragged Watson Pharma to court for patent infringement and breach of the contract inked by the two companies in 2007. The contract followed an ANDA filed by Watson Pharma in 2006, also seeking to market generic versions of Adderall XR.
Apart from Adderall XR, the other ADHD treatment at Shire is Vyvanse. ADHD has a lucrative market. The awareness regarding ADHD is low across the globe. Apart from Shire, the market includes players such as Eli Lilly & Company (LLY), Johnson & Johnson (JNJ) and Novartis (NVS) with other ADHD treatments under development.
.Our Recommendation
We currently have a Neutral recommendation on Shire, which is supported by a Zacks #3 Rank (short-term Hold rating). We have a similar stance on Watson Pharma.
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
SHIRE PLC-ADR (SHPGY): Free Stock Analysis Report
WATSON PHARMA (WPI): Free Stock Analysis Report
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