Teva's Tough Pill to Swallow

It merely forestalls the inevitable, but Eisai's (OTC BB: ESALY.PK) court victory over Teva Pharmaceutical (Nasdaq: TEVA  ) stops the generics maker from cutting in on its lucrative Alzheimer's treatment, Aricept.

Eisai is 2-for-2 in protecting its patents from Teva. Last year, Eisai doled out some tough medicine when a court agreed that both Teva and Dr. Reddy Labs (NYSE: RDY  ) had infringed on its heartburn medication Aciphex. Eisai had sued another generics maker, Mylan (NYSE: MYL  ) , and had agreed to abide by the outcome of the Teva lawsuit.

Yet it's only a temporary reprieve for Eisai. While Aricept is the No. 1-selling treatment for Alzheimer's, it is scheduled to go off patent in 2010. Teva, like many generic-drug firms, was moving in early on the patent, saying it was unenforceable. The court ruling in Eisai's favor is only a preliminary injunction against Teva going to market early. The generic-drug maker had been granted temporary Food and Drug Administration approval for its version of Aricept and was expecting final approval by the end of next month.

Generic competition has not been Eisai's only headache. Its treatment, which is co-marketed here in the U.S. with Pfizer (NYSE: PFE  ) , has come under some heavy fire from regulators who view it as an expensive therapy that offers little benefit. Last August, the United Kingdom's High Court upheld the decision by that country's health agency to stop paying for Aricept for new Alzheimer's patients. The National Institute for Health and Clinical Excellence said it was too expensive and offered too few benefits for taxpayers to continue paying for treatment.

There is no cure for Alzheimer's, and Aricept only temporarily improves cognitive functions for those suffering from it. Yet doctors, patients, family members, and caregivers all tout the effects -- even if relatively fleeting -- that Aricept and similar drugs produced by Johnson & Johnson (NYSE: JNJ  ) , Novartis (NYSE: NVS  ) , and Forest Labs (NYSE: FRX  ) provide. Such are the vagaries of subsidized national health care.

With Aricept going off patent in 2010 and Aciphex subject to generic competition three years later, Eisai has been actively pursuing cancer treatments as part of its "Dramatic Leap Plan." It bought a portfolio of treatments from Ligand Pharmaceuticals, acquired Morphotek last year, and in December said it was buying cancer-drug maker MGI Pharma.

The injunction may be a bitter pill for Teva to swallow, but it might give Eisai enough time until it's ready to offer another good treatment.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 610353, ~/Articles/ArticleHandler.aspx, 12/21/2014 7:04:12 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement