The loss of a key patent covering AstraZeneca's antiulcerant blockbuster Nexium in Europe is worrying analysts who fear the firm will struggle to meet its full-year earnings targets.

The European Patent Office, following a challenge by Teva Pharmaceutical Industries and 12 generic companies, says that the patent - number EP 1020461 - on Nexium (esomeprazole) is invalid and has been overturned due to a lack of inventiveness. The patent was due to expire in 2014 and relates to enantiomer protection for Nexium, which is a single enantiomer of the older ulcer drug Prilosec (omeprazole).

The Anglo-Swedish drugmaker has not made an official response as yet but has the option to appeal. Nexium is a major earner, indeed the firm's second biggest product with sales of $4.97 billion in 2010. Of these sales, some $1.20 billion were in Europe where AstraZeneca has already lost market exclusivity.

Generic likely before end-2011

The decision by the EPO "leaves the door wide open for a generic to enter the market", probably later this year, analysts at Matrix Group claimed. They added that in the UK, Dr Reddy's has already begun a court challenge in the courts to overturn the aforementioned patent and "it is possible now that this case may be a moot point".__ Navid Malik at Matrix noted that Nexium is a high gross margin product, and if it sees a generic launch in Europe "then we believe that the current company guidance may be at risk". AstraZeneca's core earnings per share estimate for 2011 is $6.95-$7.25.

He predicts "a sustained period of pressure to AstraZeneca's top line", due to pending patent expirations to key products and the recent slowdown in prescriptions for the cholesterol blockbuster Crestor (rosuvastatin). Mr Malik also noted the ongoing extended review for the blood thinner Brilinta (ticagrelor) by the US Food and Drug Administration, which is "providing further ongoing uncertainties"._