Actavis eyes $100 million after OxyContin settlement

29-04-2013

Generic drug-maker Actavis believes it will earn profits of around $100 million in the next two years from licensing patents owned by Purdue Pharma LP.

The companies signed a deal – announced on April 26 – after resolving their US litigation over Purdue’s patents protecting an abuse-deterrent formulation of OxyContin, a pain-killer drug. Purdue had sued Actavis after it applied to market copies of the drug.

Purdue has allowed Actavis to sell a “specified number of bottles” of its generic drug from January 1, 2014, according to a statement, as long as the US Food and Drug Administration (FDA) approves its application.

If the FDA fails to rubber-stamp the bid before September 1, 2014, Actavis will have to wait until October 2014 to market an authorised version of OxyContin (under which branded drugs would be sold as generics), the statement said.

The FDA said earlier in April that it will no longer approve generic versions of the original OxyContin, which was approved in 1995 and the patent for which recently expired. The drug has been abused in the past, with people crushing and snorting it to achieve a heroin-like high.

That ban does not necessarily apply to copies of Purdue’s reformulated OxyContin – the current version, released in 2010 – which contains safeguards making abuse more difficult. But generic producers such as Actavis will have to show the FDA that they have taken steps to make their versions hard to manipulate.  

Actavis believes its marketed version (if approved) will make $100 million in gross profit in 2014 and 2015, according to a statement, adding that it expects the agreement to make a “more modest contribution from 2016 through 2019”.

“The agreement provides a date certain launch [sic] that eliminates the risk of current and future litigation related to all versions of OxyContin,” said Paul Bisaro, president of Actavis. “It also eliminates the uncertainty surrounding FDA review and approval of generic versions of abuse deterrent products.”

John Stewart, president of Purdue, said the “resolution relieves us of the risks, distractions and costs of continued litigation. We are pleased that this matter has been resolved in a manner that respects the inventions we have incorporated into the reformulated OxyContin tablets”.

Dominick Conde, partner at law firm Fitzpatrick, Cella, Harper & Scinto in New York, said it was unclear why Actavis will have to wait until September 2014 to enter the market.

A Purdue spokesman confirmed to LSIPR that Actavis is the only generic company allowed to sell versions of abuse-deterrent OxyContin, but she did not confirm for how long this would be.

OxyContin had US sales of about $2.8 billion in the twelve months ending January 31, 2013, according to IMS Health. Conde said it was hard to say whether Actavis’ projected $100 million gross profits for the next two years would be a significant amount, noting that such seemingly large profits would be unsurprising if they were earned by only one generic producer.

“It depends on the market at the time,” he said.

actavis, oxycontin, purdue pharma, Fitzpatrick, Cella, Harper & Scinto