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Pharma & Bio Ingredients
"The issue is that most people assumed there couldn't be generic competition to thalidomide until 2020," Cowen & Co. analyst Phil Nadeau told Reuters. "The fact that Barr Labs, who is a very credible generic company, is suggesting that they have maybe found a way around some of Celgene's patents is a surprise to most people."
Celgene, which also has approval to market Thalomid as a cancer treatment, reported $108 million in total Thalomid sales in the third quarter -- a 9.3 percent increase. That amounted to about 44 percent of its $245 million in revenue.
Barr later confirmed it is seeking approval for a generic version of Celgene's Thalomid in the 200 milligram dosage strength. The 200-mg dosage has annual sales of about $59 million, Barr said.
Celgene said it intends to file a complaint alleging infringement of its patents. By bringing suit, Celgene said it would be entitled to up to a 30-month injunction against Barr's marketing of generic thalidomide.
Summit, New Jersey-based Celgene said it has seven issued patents with expiration dates of 2018 and 2020. The patents cover methods of more safely administering pharmaceutical products, including thalidomide, which is known to cause birth defects.
Celgene also said it holds "broad" patents protecting methods of using thalidomide for treating blood and solid-tumor cancers. Thalomid's sales are predominantly from use in multiple myeloma, a blood cancer, according to Nadeau.
Celgene has patents around its restrictive distribution safety program, known as STEPS, which involve products or drugs that cause birth defects or have other adverse effects.
In 2004, Celgene licensed patents tied to the STEPS program to Barr and several other companies involved in marketing versions of the acne drug Accutane, which is also strongly linked to birth defects.
"People are speculating that maybe Barr, through its experience with STEPS, has found some way around the (intellectual property)," Nadeau said.
A potential generic Thalomid is seen as less hurtful to Celgene in the future because the company has a newer myeloma drug, Revlimid, that is expected to be the main growth engine. For example, Nadeau estimates that only about 12 percent of Celgene sales will come from Thalomid by 2010.
