The legal tussle between Shire (SHPGY), Sandoz, Inc. — the generic arm of Novartis (NVS) and Amneal Pharmaceuticals — intensified with Shire filing a patent infringement case against the two companies relating to Vyvanse. Vyvanse is indicated for treating patients suffering from attention deficit hyperactive disorder (ADHD).
Amneal and Sandoz have filed abbreviated new drug applications (ANDAs) with the US Food and Drug Administration (FDA) to market generic versions of Vyvanse at all doses.
ADHD refers to a neurobiological disorder that is often hereditary in nature. The disease gives way to lack of attention and often results in impulsiveness and hyperactivity.
We note that the marketing exclusivity for Vyvanse expires in February 2012, under the Hatch-Waxman Act. By filing patent infringement lawsuits Shire has ensured a 30-month stay by the FDA. Consequently, the ANDAs cannot be cleared by the US regulatory body before August 23, 2014 or until a court rules the patents as invalid or not infringed, whichever happens earlier.
We note that Shire is also entangled in a legal battle with Watson Pharma (WPI) which has filed an ANDA to market a generic version of another ADHD drug, Adderall XR. The market for ADHD is lucrative. Apart from Shire, the market has players such as Eli Lilly & Company (LLY) and Johnson & Johnson (JNJ).
Our Recommendation
We currently have a long-term Neutral recommendation on Shire. The company carries a Zacks #2 Rank (Buy rating) in the short term.
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