Biotech Values

[DewDiligence]

SNY Loses Lovenox ‘Inequitable Conduct’ Case

[MNTA is up about 2% in pre-market trading on Nasdaq.]

http://online.wsj.com

>>
By Elena Berton
02-09-07 0631ET

LONDON (Dow Jones)--French drugmaker Sanofi-Aventis SA (SNY) said Friday it lost a court case against two generic drugmakers that have been attempting to sell cheaper copies of Lovenox, its top-selling drug.

Although the patent protecting Lovenox doesn't expire until 2012, Amphastar Pharmaceuticals and Teva Pharmaceutical Industries Ltd. (TEVA) have been planning to launch generic copies of the drug in the U.S. [provided of course that they get FDA approval to do so].

The trial was to determine whether Sanofi-Aventis engaged in so-called inequitable conduct when it initially filed the Lovenox patent.

Sanofi-Aventis said in a statement it is currently evaluating its options for further legal recourse. A company spokesman declined to elaborate on Sanofi-Aventis' plans or the available legal options following the unfavorable court ruling.

Lovenox, a blood thinner, is the company's best-selling drug, with sales totaling EUR2.15 billion in 2005.

At 1123 GMT, Sanofi-Aventis shares were down 1.5%, at EUR66.8 in a higher Paris market.

Collins Stewart analyst Navid Malik said that while at the moment no generic drugmaker has regulatory approval to sell the blood thinner in the U.S., Lovenox's intellectual property has significantly diminished with the outcome of the trial.

Swiss private bank Vontobel said the risk of a generic version of Lovenox is real and makes an eventual takeover of Bristol-Myers Squibb Co. (BMY) by Sanofi-Aventis ever more likely.

Jerome Berton, an analyst with French brokerage Aurel Leven, expressed surprise about the outcome of the ruling but noted that in addition to legal barriers, there are further regulatory and manufacturing hurdles that can help protect Lovenox against generic competition.

Proving inequitable conduct - which may include the submission of incomplete documents when applying for a patent - could invalidate the entire patent.

Still, generic drugmakers may have to struggle to get Lovenox copycats approved by the U.S. Food and Drug Administration. The drug, which is derived from pig intestines, requires a complex manufacturing process that is difficult to duplicate.

Lovenox is also under threat by generic drugmaker Momenta Pharmaceuticals Inc (MNTA), which has teamed up with Sandoz, a unit of Swiss drugmaker Novartis AG (NVS).

As well as Lovenox, Sanofi-Aventis is defending its second-best selling product, Plavix, in a U.S. court.
<<