Wyeth Reeling As Teva Ships Generic Protonix

The drugmaker was caught by surprise and plans to file a patent infringement lawsuit to stop the Israeli generic manufacturer from making additional shipments of its heartburn med. Meanwhile, Wyeth is revising its business plan and will have to cut costs. Wall Street reacted by boosting Teva shares, but punishing Wyeth stock, which was down by 4 percent at one point this morning.

The companies are already embroiled in a lawsuit over the drug. In September, a federal Judge in New Jersey denied a motion by Wyeth and its partner, Altana Pharma, to halt sales of Teva’s generic version, which the FDA approved the previous month. While Teva is not disputing it infringed the patent, it is arguing the patent itself is not valid, the Associated Press reminds us. Wyeth, which expects a trial to begin in the second half of next year, already filed an appeal over the denied injunction.

In a conference call, Wyeth estimated that Teva likely began shipping the generic drug Friday and several analysts expressed concern that Teva’s launch may have been substantial. In its own conference call, Teva categorized the Protonix launch as “relatively full” but limited to the US. Most shipments won’t be received until next month, but didn’t provide additional details on the launch.

Bernie Poussot, Wyeth’s president and chief operating officer, who becomes ceo next week, told analysts that Wyeth will stand by its position that the patent is valid and enforceable while heading into further Teva negotiations. “We are going to use the days ahead to assess our best options,” he said in a conference call. The Protonix patent is set to expire in July 2010, though Wyeth could extend the date to 2011 if it seeks a pediatric use for the drug. Protonix had sales of $1.4 billion during the first nine months of 2007.

Wyeth exec said on a conference call that Teva has agreed to cease shipments of its drug for 30 days while the two companies try to negotiate a settlement. Wyeth said previous talks have been unsuccessful. Meanwhile, Wyeth is examining every aspect of its to cut costs to offset the impact of a generic launch of Protonix, which generated sales of about $1.4 billion in the first nine months of the year.

“We will look at every area of investing and spending,” Poussot told analysts on the call. That includes sales and marketing, research and development and manufacturing, he said. In addition, the company will consider entering into partnerships or alliances with other drugmakers.

Source: Associated Press