Any concerns that Barr Pharmaceuticals
The generics industry plays a high-stakes game, trying to be first to market with low-cost substitutes for high-cost, high-profit patented drugs. Motley Fool Stock Advisor recommendation Barr saw revenue grow to $599 million this quarter as a result of the Pliva acquisition. The company is the third-largest generics manufacturer after Teva
Now that Mylan Labs
Barr and the rest of the generics industry got a big boost from the Supreme Court earlier this month, when it ruled that combining two existing patented technologies to make a new "invention" wouldn't pass muster if it was so obvious. While that ruling was not related to pharmaceuticals, the thinking is that the generics industry battles reformulated drug patents all the time, so it doesn't take much of a leap to transfer the ruling to the pharmaceutical industry. An extended-release formula of a drug about to go off-patent might be "obvious" enough not to warrant further patent protection.
Such a ruling would make it easier to introduce generic drugs. For example, Barr has challenged the patent of Sanofi-Aventis'
Sales of generics at Barr rose to $475 million in the quarter from $200 million last year, primarily thanks to the integration of Pliva. It's the second straight quarter where Pliva pumped more profits into the generics maker. Without any hiccups, the expansion of Barr's operations into previously untapped markets is a prescription for fueling further growth of its generics sales.
Fool contributor Rich Duprey owns shares of Barr but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.