Eli Lilly and Company LLY received disappointing news when the German Court of Appeal ruled a case against the company. Eli Lilly’s shares were down over 3% following the news.
In a case against Actavis ACT, the German Court said that Eli Lilly’s Alimta (pemetrexed disodium) will not be infringed by the generic maker Actavis which is intending to market a dipotassium salt form of pemetrexed in Germany. Alimta’s compound patent in Germany is set to expire in Dec 2015.
Eli Lilly said that it still believes that Alimta's vitamin regimen patent would be infringed by the entry of generics before Jun 2021. The company said that it will be seeking permission to appeal the German Court’s ruling.
We note that in April last year, the English High Court gave a similar ruling where it stated that the patent of Alimta will not be treated as infringed if a generic competitor expresses its intent to market certain alternative salt forms of the drug in the UK, Italy, France and Spain. The appeal of the decision is expected soon.
Alimta is an important product at Eli Lilly, contributing around $2.8 billion of sales in 2014. The drug is indicated for the treatment of various forms of cancer. Sooner-than-expected entry of generics of the drug will be a huge loss for the company.
Eli Lilly is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Cytokinetics, Incorporated CYTK and Affymetrix Inc. AFFX – both carry a Zacks Rank #1 (Strong Buy).
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