UK drugmaker Shire said yesterday it had cut a deal with that would prevent US generics firm Barr from launching a copycat version of its Adderall XR drug for attention-deficit hyperactivity disorder until 2009.
Barr has recognised that three US patents covering Adderall XR are valid and enforceable, and that its application to sell an Adderall XR clone contravenes one of them, said Shire. It will be prevented from launching its product unless another party launches a generic version in the USA.
The development is critical for Shire, which is defending Adderall XR as it tries to bring new products through development to reduce its reliance on the flagship product. Adderall XR sales were $221 million in the second quarter of this year out of total revenues at Shire of $440 million.
The UK firm maintains that no payments have been made to Barr under the terms of the settlement, although Shire has taken out a license for a vaginal drug delivery technology developed by Barr’s Duramed subsidiary, as well as a license for Duramed’s already-marketed oral contraceptive Seasonique (levonorgestrel/ethinyl estradiol) in the five main European markets (the UK, Germany, France, Italy and Spain).
Shire settled earlier this year with another generics firm, Impax Laboratories, in a deal which allowed Impax to market a generic version of Adderall XR 181 days following Barr’s launch. Barr’s generic holds first-to-file status in the USA, which means it is entitled to be the only generic on the market for six months after Shire’s patents on Adderall XR expire.
Shares in Shire were up 5% in mid-morning trading today at 928.5 pence, not far short of its 52-week high of 945 pence.
Under the terms of the new Barr agreement, Shire will make an initial payment of $25 million to Duramed for previously incurred product development expenses, and will reimburse the US firm for future development expenses up to a maximum of $140 million over eight years. Duramed has also agreed to acquire the immediate-release Adderall product from Shire for $63 million.
The agreement still has to pass Federal Trade Commission scrutiny. The US authorities are paying closer attention to deals which see generics being delayed from entering the marketplace, and last week lawmakers dissolved an agreement between Bristol-Myers Squibb and Apotex that would have prevented the Canadian generics company from launching its generic until 2011. Apotex promptly launched its generic and patent litigation between the firms has resumed.
Analyst Annie Cheng of JP Morgan said she felt the deal was 'FTC-friendly', as all cash payments had an economic basis and the deal allows the genric to reach the market 10 years prior to the Adderall XR patent expiry in the USA.
The agreement "will give Shire time to switch patients to the
next generation ADHD product, NRP104," she added, noting that this could reach the market in early 2007.