Global Insight Perspective | |
Significance | The announcements attack two critical growth-drivers in Pfizer's portfolio, with management (somewhat ambitiously) expecting sales of cholesterol giant Lipitor (atorvastatin), the world's best-selling medicine, to reach US$13 billion in 2006. Meanwhile, Exubera (inhaled insulin) is a highly attractive new drug approval that is awaiting launch, and the suit by Denmark's Novo Nordisk provides significant overhang to its prospects. The Lipitor verdict is a longer-term negative that could be overturned, but the Novo Nordisk suit provides near-term risks that could prevent Exubera's launch in September. |
Implications | While Kindler was not primarily assigned the CEO position in order to elevate Pfizer's legal expertise, the timing of the legal assaults coincides appropriately with his appointment, and is highly symbolic of the challenges that the company faces, having only just begun to absorb the impact of patent loss on antibiotic Zithromax (azithromycin) and anti-depressant Zoloft (sertraline). |
Outlook | The intellectual property (IP) surrounding inhaled insulin is something of a minefield. However, on initial examination, Global Insight does not feel that Novo Nordisk holds a position in this area similar to Amgen's (U.S.) erythropoietin IP. The loss of 15 months of Lipitor exclusivity shaves hundreds of millions of dollars off Pfizer's growth prospects beyond 2010, although we hope the atorvastatin/torceptrapib combination treatment will have begun to yield commercial impetus by that stage. |
See You in Court - Again
Jeff Kindler, the new CEO of Pfizer and the company's former general counsel, will have woken up this morning to a taste of what is to come during his tenure at the head of the world's largest drug firm, amid two significant legal assaults. A U.S. appeals court yesterday partially overturned a verdict issued late last year by the District Court on the patent base for the company's cholesterol drug Lipitor (atorvastatin). While the District Court dismissed Indian drug-maker Ranbaxy's patent challenge on both major counts, the appeals court has overturned Pfizer's '995 patent, which expires in June 2011. The core '893 patent, which expires in March 2010, remains intact.
The two patents represent the core of the Pfizer/Ranbaxy dispute: the '893 patent covers the racemic mixture (November 2006, with an extension to March 2010), while the '995 patent covers the enantiomer version, which has now failed the test of obviousness in most markets, including the United States. Pfizer has immediately announced that the decision was made because of a "technical defect" in the patent, and that there is a process for correcting this type of defect with the U.S. Patent and Trademark Office (PTO), which it will now pursue.
Lipitor's Patents After the U.S. Verdict | |||
Patent Number | Description | Expiration | Comment |
United Kingdom | |||
UK 247 633 | Racemic mixture | May 2007 | Upheld (October 2005) |
Patent extension | Nov 2011 | ||
UK 409 281 | Enantiomer patent | July 2010 | Dismissed (October 2005) |
United States | |||
'893 | Racemic mixture | November 2006 | Upheld (December 2005, August 2006) |
Patent extension | March 2010 | ||
'995 | Enantiomer patent | June 2011 | Dismissed (August 2006) |
Meanwhile, Danish diabetes specialist Novo Nordisk has filed a patent infringement lawsuit in the U.S. District Court for the Southern District of New York, relating to Pfizer's new inhaled insulin device Exubera. The Danish company claims that Exubera infringes on five of its insulin delivery patents: one relating to the method of administration, and four related to the dosage control delivery, inhalation volume and flow rate, and aerosol particle size of pulmonary insulin. Novo Nordisk has demanded that the Court Pfizer's launch of Exubera, which is expected in September, following a wide-ranging detailing and training programme. Pfizer has yet to respond to the challenge, and is currently reviewing the lawsuit.
Novo Nordisk's lawsuit is not entirely surprising, as the company has been actively strengthening its IP portfolio on inhaled insulin over the past few months; in July, it acquired patents relating to the administration of proteins via inhalation from Aradigm Corporation (U.S.), with whom it is co-developing a pulmonary insulin candidate device that entered Phase III in May. Aradigm had previously hinted at the strength of its patent portfolio in this area, which includes breath guidance technology; this targets the precise level of insulin to the appropriate area of the lung, and utilises a liquid form of insulin strips. Novo Nordisk is now taking this a step further, and pushing its legal machine to acquire a commercial stake in Exubera.
Outlook and Implications
Clearly, this is not the end of the Lipitor patent saga, nor is it anything other than the very beginning of what will probably turn into a series of lawsuits surrounding the IP of inhaled insulin. If Pfizer is unable to "correct" the technical defect on Lipitor's '995 patent with the PTO, it is likely to turn to the Court of Appeals for the Federal Circuit--an option that is also available to Ranbaxy, for the '893 patent. Still, even without the '893 patent, Ranbaxy has reinforced its position at the front of the queue for Lipitor generics. We believe that Ranbaxy is now in a position to launch generic Lipitor in March 2010 with 180 days' exclusivity, as it has filed Paragraph IV certifications on a number of other Lipitor patents (expiring up to 2017), which Pfizer has ignored. Unless there are further developments in the regulatory environment surrounding authorised generics over the next four years, Pfizer will probably utilise its Greenstone generics unit to offset the impact of Lipitor's patent expiration. Pfizer could also alter course and engage in mergers and acquisitions (M&A) in the generics sector, which could target a company such as Ranbaxy.
The earlier Lipitor patent expiration is a significant material setback for Pfizer, although it is a longer-term prospect that has a significant likelihood of being overturned, despite falling in line with verdicts on the enantiomer patent around the world. However, the Exubera lawsuit provides far greater near-term damage prospects. Indeed, it could prevent or delay the drug's launch for the foreseeable future, which would represent a severe setback for one of the most hotly anticipated new products in the whole pharmaceutical industry, let alone the diabetes market, over the last few years. Pfizer has invested big money in acquiring sole rights to Exubera, and it has spent protracted, costly years in delayed development. Product margins are tight, due to the cumbersome and expensive manufacturing process, and the lawsuit further clouds Exubera's outlook.
Related Articles:
- United States: 21 July 2006: Lipitor Comes Through at Just the Right Time for Pfizer in H1 Results
- Austria: 26 April 2006: Courts Confirm Ranbaxy's Victory over Lipitor Patent in Austria
- Finland: 22 February 2006: Lipitor Jinx Continues for Ranbaxy, as Finnish Court Issues Injunction
- United States: 30 January 2006: Approval for Exubera Continues Good Start to Tough Year for Pfizer
- World: 21 December 2005: Pfizer Scores More Lipitor Patent Victories
- United States: 19 December 2005: Pfizer Beats Chest After Lipitor Patent Victory Over Ranbaxy