Effexor and generic version venlafaxine hydrochloride are used to treat major depressive disorder. Now it is likely that the drug will become more widely available to improve the mood of patients and the morale of Barr Pharmaceutical
For Fools with a long-term investing time horizon, this potential addition to Barr's portfolio could prove extremely beneficial to the company's bottom line. In 2006, Effexor was Wyeth's top-selling drug, with $3.7 billion in sales. The FDA approved the first generic version of Effexor for sale in the U.S. only 11 months ago. The approval was granted to Israel-based Teva Pharmaceuticals
The arrival of generic Effexor has had an almost immediate impact in the market. An 11% increase in Wyeth's Q4 sales of Effexor was followed by a 6% decrease in Q1 sales of the drug, with the company attributing the slip to the recent emergence of generic competition.
The total market for venlafaxine hydrochloride tablets had annual sales of approximately $182.8 million for the 12 months ending April 2007, according to IMS sales data. Given that Teva was permitted to sell the drug in the U.S. for only a portion of 2006 and was eligible for generic exclusivity, one could expect this amount to increase significantly on a year-over-year basis -- especially if Barr were to enter the picture. The long-term impact could also be significant for Barr's generic product sales, which increased 12% to $839 million for its FY 2006. Generics accounted for approximately 65% of the company's FY 2006 sales.
It will be some time before Barr shareholders are able to reap the rewards of this development. The exclusivity attached to the patent protecting Effexor isn't scheduled to expire until June of next year, at which time Barr anticipates receiving final approval and commencing its marketing of the product in the U.S.
Have the market's recent swings been making you feel a bit jittery? Check out Tom and David Gardner's market-beating Stock Advisor newsletter service to see which stocks could bring some stability to your portfolio. You can check out their recommendations with a 30-day free trial.