Schizophrenia Daily News Blog

Zyprexa Patent Battle Continues

The Indianapolis Star reports that the makers of generic drugs to appeal; 3 companies will continue efforts to get share of the billions spent on the antipsychotic drug.

Generic Drug Companies Challenge Lilly's Patent on Zyprexa

The Indianapolis Star stated that while "round one" of the legal battle went against three makers of generic drugs that had challenged Eli Lilly and Co.'s patent on Zyprexa, its best-selling drug. But attorneys for the companies immediately vowed to appeal -- and they like their chances in Round Two.

Zenith's parent company, Ivax Corp., issued its statement shortly after Judge Richard L. Young rendered his decision Thursday. Stuart Sender, an attorney for another challenger, Dr. Reddy's Laboratories, said it also would appeal.

It's no secret why the drugmakers are trying to break Zyprexa's patent. Lilly's best-seller, an antipsychotic drug, generated U.S. sales of $2.4 billion and worldwide sales of $4.4 billion in 2004. Those totals equal $12 million every day, or about $8,000 every minute.

What's hard to say, however, is whether Zenith, Dr. Reddy's and Teva stand a better chance of victory on appeal, which will be heard in a federal court in Washington, D.C.

That was where Barr Laboratories won a reversal in 2000 from an appeals court and broke Lilly's patent on Prozac three years early. At the time, Prozac was Lilly's best-seller, generating annual worldwide sales of $2.6 billion.

"That's obviously something that the generics hope for," Sender said. "The federal circuit looks anew at a lot of cases."

An appeal will extend the court battle for months, but the generic firms still have a chance to score a financial windfall by breaking Lilly's Zyprexa patent before it is scheduled to expire in 2011.

"It's like holding a lottery ticket," said Casey Alexander, a pharmaceutical analyst at Gilford Securities in New York.

The company holding the biggest ticket is Zenith. It was the first to file a patent challenge for five of the six dosages of Zyprexa. That includes the most popular 5 mg dose, which has an average wholesale price of $6.89 per tablet.

Its first-to-file status would give Zenith a six-month window to sell generic Zyprexa without generic competition if it won on appeal. Typically, Zenith would cut Zyprexa's price by 20 percent and gain market penetration of 40 percent, Alexander said.

If that proved true, Zenith would garner more than $300 million in revenue and more than $100 million in after-tax profit during the first six months, Alexander estimated.

Dr. Reddy's has first-in-line status for the 20 mg dose of Zyprexa, which wholesales for an average of $20.71 per tablet.