AstraZeneca (AZN) is set to receive $76 million in damages from Apotex Corp., Apotex, Inc. and Torpharm, Inc. as per a ruling by the U.S. District Court for the Southern District of N.Y. The ruling follows an earlier decision of the court which upheld two of AstraZeneca’s formulation patents covering Prilosec.
The court found that Apotex infringed the patents by selling its version of generic Prilosec between 2004 and 2007.
AstraZeneca was also looking to recover patent infringement damages related to Prilosec from Andrx Pharmaceuticals, Inc. However, in contrast to the Apotex decision, the U.S. District Court for the Southern District of N.Y. ruled in favor of Andrx Pharma and did not award any damages to AstraZeneca.
Prilosec (trade name: Losec in the rest of the world) is indicated for the short-term and long-term treatment of acid-related diseases. The drug was launched in 1988. Post patent expiry, revenues from this drug have declined significantly. In 2012, Losec/Prilosec generated revenues of $710 million, down 25% from the year-ago period. In the first nine month of 2013, revenues from Losec/Prilosec have fallen further (31%) to $364 million.
Generic competition has adversely impacted AstraZeneca’s revenues over the past few quarters. This has put significant pressure on the company. AstraZeneca is looking toward cost-cutting initiatives to drive the bottom line in the face of genericization.
AstraZeneca carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Actelion Ltd. (ALIOF), Jazz Pharmaceuticals (JAZZ) and Johnson and Johnson (JNJ). While Actelion and Jazz Pharma carry a Zacks Rank #1 (Strong Buy), Johnson and Johnson holds a Zacks Rank #2 (Buy).
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