This article appeared in the December 2007 edition of INNsight

AstraZeneca on the ropes?

While the whole topic of patents and patent challenges can be intellectually fascinating, it is also important to remember that the defence or loss of patents has consequences in the real world.

My eye was caught by the news about a major patent punch-up in the US concerning AstraZeneca’s cardiovascular product Crestor (Rosuvastin) which is a successful cholesterol lowering agent. AZ did not actually invent the product; Crestor was initially developed by the Japanese pharmaceutical company Shionogi and in-licensed by AstraZeneca in April 1998, but AZ has turned it into a blockbuster and is keen to defend it.

Crestor had sales of just over US$2.0 billion in 2006, 59% up on 2005, of which half came from the US market and it had already sold the same amount in the first 9 months of 2007. In other words, Crestor is pretty important to them and its loss to generic competition would be a major blow. Remember that at this time last year, AZ suffered another patent blow with the loss of the European Patent on Nexium (Esomeprazole), Interestingly, the product has suffered more since then from loss of sales to low cost generic Omeprazole than from competition by generic versions of Nexium. The market has not yet been flooded with generic versions since no generic manufacturers have yet managed to take advantage of the patent cancellation in Europe.

At the time of the adverse Nexium decision, the company commented “While disappointed with the EPO decision, AstraZeneca has confidence in the intellectual property portfolio protecting Nexium. This portfolio includes process, method of use and additional substance patents with expiration dates ranging from 2009 through to 2019”. Perhaps they were right about the way to market for generic copies being more difficult than anticipated.

Nevertheless, the company is taking the issue of patent challenges seriously and is not about to roll over and play dead in the face of threats to a major product. AZ has just announced that “it has filed patent infringement actions in United States District Court, District of Delaware, against seven generic drug manufacturers, which have submitted Abbreviated New Drug Applications (ANDAs) for Crestor”. The trigger for the blast from AZ was the “Paragraph IV” filings by several companies that effectively constitute a challenge to the patent on Crestor which should expire in 2016.

The targets for its action are Aurobindo, Apotex, Cobalt, Par, Sandoz, Mylan and Sun, but AZ is not suing Teva and Glenmark, because they are only challenging two patents that are due to expire in 2020 and 2021, but are not contesting the 2016 one.

Amongst the reasons that AZ is acting so vigorously in defence of Crestor is it importance to them combined with the fact that analysts’ views of the company have become very negative following another patent defeat in October in Europe.

At that time, the European Patent Office appeals board revoked the patent covering the manufacture of the asthma treatment Symbicort (a combination of Formoterol and Budesonide). Chiesi Farmaceutici, Generics UK, Liconsa, Miat, Norton Healthcare, Yamanouchi and Zambon are reported to have combined to challenge AZ. In 2006, the product had been worth US$1.2 billion, most of which was generated in Europe.

Following that decision, analysts scrutinised the company’s product pipeline even more closely and did not like what they saw.

The stockbrokers Dresdner Kleinwort described it as “doomed to be the worst performing stock in the sector for some years”. They added that the company’s pipeline offers little support to the top line over the next eight years. Taken together, these different factors means that AZ has suffered a number of painful blows recently, hence the suggestion that the company now finds itself on the ropes and desperate to strike back

No date has yet been announced for the hearings, but there can be no doubt that AstraZeneca will fight hard to hold on to Crestor. Losing it to generic competition now could be the final knockout blow that sends it reeling into the arms of a competitor and an unwanted takeover.

If you have any questions or comments

on this article, please feel free to contact me.

peter@interpharm-consultancy.co.uk

www.interpharm-consultancy.co.uk