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Reuters chimes in on “at risk” generic launches:

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh36417_2005-03-30_19-15-42_n30...

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Generic, pharma battle heat up after Pfizer win

CHICAGO, March 30 (Reuters) - Generic drugmakers face a new threat when they launch copied versions of brand-name drugs before litigation is complete, after an unusual victory for Pfizer Inc. (PFE.N: Quote, Profile, Research) in halting sales of one of its generic rivals, analysts said.

A U.S. District Court in New Jersey ruled in favor of Pfizer Inc. (PFE.N: Quote, Profile, Research) , granting a preliminary injunction that forced Teva Pharmaceutical Industries Ltd. (TEVA.O: Quote, Profile, Research) and Ranbaxy Laboratories Ltd (RANB.BO: Quote, Profile, Research) to stop sales of quinapril, a duplicate version of Pfizer's Accupril blood pressure drug.

The decision may well be the first time a court has stopped sales of an already launched generic product, analysts said, raising the stakes in an already high-stakes gamble.

"I've never seen this happen," said Richard Watson, an analyst at William Blair & Co.. "Financially it is not a huge deal (for Teva), but psychologically, I think you have to think about this."

Generic drug makers, facing more aggressive tactics from big pharmaceutical companies striving to extend patent life for their drugs, have begun selling generic versions before the court battles are complete, known as an "at risk" launch.

The risk comes from the potential damages the generic companies face should they ultimately lose their patent challenge and be forced to pay damages for sales lost to a big drugmaker.

Last October, Pfizer failed to get a court order to stop Alpharma Inc. (ALO.N: Quote, Profile, Research) from selling a generic version of its multibillion-dollar epilepsy drug Neurontin while the patent case winds its way through the courts.

But on Tuesday, a federal judge found that Pfizer was likely to prevail in its Accupril patent infringement lawsuit and took the further step of ordering cessation of quinapril sales.

"We are not aware of any other 'at risk' (before appeals court decision is rendered) launch that has been pulled from the market, so this comes as a first and unusual development in the sector," CIBC analyst Elliot Wilbur said.

Pfizer is seeking damages from the two companies for lost revenue from the drug that had U.S. sales of $387 million in 2004. Damages from a Neurontin victory would be significantly higher.

Israel-based Teva, the world's largest generic drugmaker, and Ranbaxy, India's largest pharmaceutical company, are appealing the temporary injunction even as Pfizer seeks to make it permanent.

Watson said the court ruling will likely not deter generic companies from taking calculated risks.

Wilbur was more cautious, however, saying it could "put into question the probability of upcoming at risk launches."
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