Biotech Values

[DewDiligence]

Quiz: Why does MRX not get a statutory 30-month
stay on FDA approval of generic Solodyn? (See the
bottommost paragraph below for discussion.)

http://biz.yahoo.com/ap/080115/medicis_mover.html?.v=2

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Medicis Acne Drug Faces Patent Challenge From Impax Labs, Sending Stock Sharply Lower

Tuesday January 15, 7:36 pm ET

NEW YORK (AP) -- Shares of Medicis Pharmaceutical Corp., which makes skin medications, fell sharply to a new annual low after Impax Laboratories challenged a patent for its Solodyn drug for the treatment of acne.

In a filing with the Securities and Exchange Commission Tuesday, Scottsdale, Ariz.-based Medicis said Impax informed the company it filed an abbreviated new drug application with the Food and Drug Administration. Impax is seeking approval to sell a generic version of Solodyn.

Hayward, Calif.-based Impax didn't tell Medicis about the timing or status of the FDA's reviews of its filing, according to Medicis. The company also said Impax did not say whether it had proven bioequivalence for Solodyn.

Medicis said it is evaluating Impax's letter and considering its options.

Goldman Sachs analyst James Kelly expressed concern that Solodyn generates nearly half of Medicis sales. According to his models, Solodyn represents 50 percent of gross profits for 2008.

Kelly pointed out that a generic launch is possible as soon as Impax receives approval from the FDA, whereas most patents are generally protected for 30-months following such an approval. [The newswire meant to say 30 months following the start of a lawsuit.] He therefore speculates a settlement between the two companies.
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