Barr's Lawyers Earn Their Keep

Barr Pharmaceuticals' (NYSE: BRL  ) lawyers are earning their paychecks these days. Earlier in the year, they got a patent on Bayer's birth-control drug, Yasmin, thrown out. Then yesterday, they won a patent challenge covering Boehringer Ingelheim Pharmaceuticals' Mirapex.

Mirapex, which treats the neurological problems associated with restless leg syndrome and Parkinson's disease, had sales of about $381 million for the 12 months ended in April, according to IMS Health. In the long run, that won't translate into a whole lot of sales of generic drugs, which are often priced at about 20% of the branded price. But Barr has the 180-day exclusive selling period, since it was the first to file an abbreviated new drug application. That should give the generic-drug maker six months of sales, with a price closer to 90% of the branded price, before other generic-drug makers enter the market.

Barr hasn't said when it will launch its generic version of Mirapex. Boehringer will almost certainly appeal the ruling, and if Barr launches the drug now and loses the appeal, it could be on the hook for damages. Perhaps Barr will hedge its bets and strike another authorized generic drug deal, like it did with Bayer.

When Barr does finally launch, the big loser -- other than Boehringer -- will be GlaxoSmithKline (NYSE: GSK  ) , which sells a competing drug, Requip. Some patients taking Requip may switch over to generic Mirapex to save a few bucks on copayments every month -- or a lot of bucks, if they don't have insurance.

But Barr's lawyers aren't done yet. Next, they'll try to settle a case with Johnson & Johnson (NYSE: JNJ  ) over its birth-control drug Ortho Tri-Cyclen Lo. Barr also has lawsuits pending with Sanofi-Aventis (NYSE: SNY  ) over its patents on allergy drugs Nasacort and Allegra D. Given those stakes, Barr's investors certainly hope the lawyers keep doing their jobs.

Barr is an active Stock Advisor pick. Check out a 30-day risk-free trial of the newsletter service, and see all the current Gardner brothers' recommendations.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson and Glaxo are Income Investor recommendations. The Fool has a disclosure policy.


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