The entry of generic competition for key products always deals a major blow to the branded company’s financials. Usually, the innovator company explores different avenues to reduce the impact of genericization of key products. These include filing lawsuits against the companies that are infringing the patents, launch of authorized generic versions as well as the signing of deals targeted to boost the pipeline or product portfolio. Sometimes, the innovator companies sign settlement agreements with generic companies to delay the entry of generics.
Late last week, Supernus Pharmaceuticals, Inc. (SUPN) announced that it has filed a patent infringement lawsuit against TWi Pharmaceuticals, Inc. and TWi International LLC accusing both of infringement of four patents covering Supernus’ antiepileptic drug, Oxtellar XR.
Supernus filed the complaint against TWi in the U.S. District Court for the District of New Jersey alleging that TWi’s abbreviated new drug application (ANDA) seeking FDA approval for its generic version of Oxtellar XR has infringed the patents covering the product.
Supernus confirmed that Oxtellar XR, which was launched in Feb 2013 for the treatment of epilepsy, is protected by four patents listed in the FDA's Orange Book, all of which are slated to expire in 2027.
Since Supernus has filed the lawsuit within 45 days of receiving the paragraph IV certification notice, TWi’s ANDA for its generic version of Oxtellar XR cannot be cleared by the FDA within a period of 30 months.
Our Take
Supernus is currently engaged in a number of patent infringement lawsuits involving its two approved drugs. The company already filed lawsuits against Actavis (ACT) for the infringement of Oxtellar XR and Trokendi XR patents, and against Zydus and Par for the infringement of Trokendi XR patents.
We note that Trokendi XR and Oxtellar XR are the only two marketed products at Supernus. Jointly, these products generated revenues of $59.1 million in the first nine months of 2014. If generic versions of these drugs enter the market, Supernus will have a tough time maintaining its top line.
Investors interested in the health care sector may consider Impax Laboratories Inc. (IPXL) and Teva Pharmaceutical Industries Limited (TEVA).
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