2011 was the most precipitous year to date for drug “patent cliffs,” a term that describes the recent glut of patent expirations in the pharmaceutical industry. (We highlighted the year in our 2011 drug patent expiration post here.) Drug titans Pfizer and Eli Lilly saw patents expire for drugs Lipitor and Zyprexa, which were the number 1 and number 13 top sellers in the world in 2010. The result is a variety of media reports that show decreases in stock price and projected 2012 profits for Lilly, and unprecedented strategies for extending profits by Pfizer.
We’ve collected the top 5 drugs set to expire this year, as judged by their U.S. sales revenues in 2010. This looks to be an equally, if not bigger, year for patent expirations. (Part II will be published next Friday.)
1. Plavix (Clopidogrel) – $4.56 billion 2010 U.S. sales – Bristol-Myers – May 2012
Plavix is the world’s second-best selling drug, after Pfzer’s Lipitor. Like Lipitor, it’s a heart drug, used to “prevent unwanted blood clots and avoid heart attacks and strokes.” The patent for Plavix was set to expire in 2011, but was extended by six months to its current date through an arrangement with the FDA. The FDA grants such extensions to companies that offer to do research on children, an under-served category in pharmaceutical research. Although the studies of Plavix on infant health yielded no significant results, the extension allows Brystol-Myers to squeeze a few more months’ profit out of their blockbuster drug. The AP reported that the company is facing one of the harshest patent cliffs of any Big Pharma firm, with four of their five best-selling products’ patents expiring between 2012 and 2015.
It’s not all bad news around Plavix, though. Just this week, Bristol-Myers won a settlement in the hundreds of millions for infringements from generic drugmaker Apotex, who released their own clopidogrel drug six years ago. The conflict with Apotex started in 2002, and has been a huge source of controversy ever since. Regardless, the litigation is done and Bristol-Myers may finally be nearing the inevitable patent cliff.
2. Seroquel (Quetiapine) – $3.48 billion 2010 U.S. sales – AstraZeneca – March 2012
Seroquel is the second best-selling antipsychotic medication, only recently topped in U.S. sales by Abilify. That’s not to say it’s not a blockbuster, though. Last year, sales numbers showed that the drug’s sales represented 40% of AZ’s pre-tax profit in 2010. That’s all the more impactful if one takes into account that it only represents 13% of the drugmaker’s revenue, making it a massively profitable product. The lapsing of patent protection for this cash cow in March will bring on an onslaught of imitators, some of which are already being sold in Canada, where its patent has already expired. Like Plavix, the drug was supposed to expire last fall in the U.S., but was extended through a pediatric research deal with the FDA.
AstraZeneca as a whole seems to be struggling with the patent cliff. It has already lost protection of some drugs, and the company found out this week that it lost a bid to retain exclusivity on its cholesterol drug Crestor through 2021, instead maintaining the drug’s original 2016 expiration date. The company is now scrambling to shore up investor confidence. Recent plans include laying off 12% of its global workforce, buying its own stock by the billions, restructuring research facilities, and making plans to acquire smaller companies. A number of sources reporting on AZ from an investment standpoint noted the company’s “questionable” pipeline of new blockbuster drugs. Long story short: the patent cliff is steep for AstraZeneca.
Next Friday the we’ll cover the next three biggest drugs to lose protection this year
Ed. Note: Click here for Part II of the post!
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