Sanofi's Loss Is Generic Drugmakers' Gain

In the high-stakes world of pharmaceuticals, losing patent protection on a top drug and facing generic competition can mean billions of dollars in lost sales in a matter of months. Drugmaker Sanofi-Aventis (NYSE: SNY  ) is facing this prospect after recently losing a patent infringement case against two generic competitors -- Teva Pharmaceuticals (Nasdaq: TEVA  ) and Amphastar -- over its blood clot-treatment, Lovenox.

The loss of patent protection on the $3 billion-a-year Lovenox means that Teva and Amphastar will have the opportunity to market a generic version of the drug if -- and this is a big if -- either one can get FDA clearance for their generic versions. Since Amphastar is privately held and Lovenox would represent one of many generic products for Teva, publicly provided information on these companies' progress with the FDA regarding their generic versions of the drug has been scarce.

The other big beneficiary of the ruling is drugmaker Momenta Pharmaceuticals (Nasdaq: MNTA  ) . Momenta and its generic version of Lovenox have a slightly more complex path forward, as the company has to wait until the FDA rulings on Teva's and Amphastar's generics come out, and then hope that the FDA approves its generic compound. If Amphastar's generic Lovenox gets approved, Momenta will have to wait six months before the FDA approves its drug, as Amphastar will have a 180-day exclusivity period on its product.

Sanofi will be able to appeal this ruling, so the legal fight over the validity of the Lovenox patents isn't necessarily over. However, the first hurdle for generic competition on its top drug has now been cleared. Last year was tough for Sanofi in regards to generic competitors. With this latest court ruling, 2007 doesn't look to be off to a much better start.

Momenta Pharmaceuticals is a Rule Breakers recommendation. Keep tabs on big events in tiny technology with a free 30-day trial subscription to David Gardner's Motley Fool Rule Breakers.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.

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Related Tickers

10/27/2016 4:05 PM
SNY $37.25 Up +0.19 +0.51%
Sanofi CAPS Rating: *****
MNTA $11.41 Down -0.12 -1.04%
Momenta Pharmaceut… CAPS Rating: ****
TEVA $43.15 Down -0.21 -0.48%
Teva Pharmaceutica… CAPS Rating: ****