Watson Pharmaceuticals Inc. (WPI) recently announced that the United States District Court for the District of Delaware ruled against Watson Pharma in a patent infringement lawsuit regarding the generic version of Cephalon Inc.’s (CEPH) pain drug, Fentora. The court said that Watson Pharma’s generic version infringed Fentora’s ‘981 patent.
Watson Pharma said that it will review the court’s decision along with evaluating whether to appeal or not.
Earlier in the month, the District Court had ruled in favor of Watson Pharma in the Fentora patent infringement case by declaring that the company’s generic drug does not infringe two (‘604 and ‘590) of the three patents under dispute (the third being patent ‘981).
The US Food and Drug Administration (FDA) approved the generic version of Fentora in January. The regulatory body granted approval to market the 0.1, 0.2, 0.4, 0.6 and 0.8 mg strengths of the drug.
In a separate development, Watson Pharma said that it filed an Abbreviated New Drug Application (ANDA) with the US Food and Drug Administration (FDA) for generic versions of 10, 15, 20, 30, 40, 60 and 80 mg strengths of Purdue Pharma’s OxyContin. OxyContin is indicated for the management of moderate-to-severe pain.
Following Watson Pharma’s ANDA filing, Purdue Pharma filed lawsuits in the United States District Courts for the Southern District of New York, District of Delaware and Southern District of Florida, in order to prevent Watson Pharma from marketing its generic products prior to the expiration of patents. Purdue Pharma’s lawsuits led to a stay on the final FDA approval of Watson Pharma’s ANDA until August, 2013, or until court resolution of the matter, whichever occurs first.
Watson Pharma also announced that the US Court of Appeals for the Federal Circuit ruled in its favor in a patent infringement suit involving Teva Pharmaceutical Industries Ltd.’s (TEVA) birth control drug, Seasonique. The Appeals Court reversed and remanded a March 2010 ruling of the United States District Court for the District of Nevada, saying that Teva’s ‘969 patent is invalid and unenforceable and Watson Pharma’s generic drug does not infringe the patent.
Our Take
We currently have a Neutral recommendation on Watson Pharma, supported by a Zacks #3 Rank (short-term Hold rating). We believe that new product launches over regular intervals will help drive the Generics business segment of the company. Further, the launch of generic drugs of Johnson & Johnson’s (JNJ) Concerta and Pfizer Inc.’s (PFE) Lipitor in the US in 2011 will help boost generic segment revenues.
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