4 June 2013Americas

Shire settles with Teva over ADHD drug

Drug-maker Teva must wait until 2015 before selling generic versions of Shire’s Intuniv product, according to a patent settlement between the companies.

Irish pharmaceutical company Shire sued Israeli generic drug-maker Teva in May 2010 over two US patents directed to Intuniv (guanfacine), an extended release prescription medicine used to treat attention deficit-hyperactivity disorder.

The lawsuit, in the US District Court for the District of Delaware, was filed after Teva submitted an abbreviated new drug application (ANDA) to sell generic versions of Intuniv, which is used to treat children between six and 17.

Teva was one of several companies sued by Shire over the two patents, including drug-makers Actavis and Watson Pharmaceuticals.

On May 31, Shire said it granted Teva a licence to sell generic versions or authorised versions of Intuniv in the US, the only country where the product is sold.

But Teva must wait until at least 180 days after December 1, 2014, the date on which Actavis can begin selling generic Intuniv products.

That’s because Actavis, which (along with Watson) settled its litigation with Shire in April this year, was the first company to apply to sell generic versions of Intuniv – and US law dictates that first ANDA filers have an exclusive 180 day-selling window.

There were no details about the deal with Teva, but in the Actavis settlement Shire is charging a 25 percent royalty rate on gross profit made from Intuniv during the 180-day exclusivity period.

Dominick Conde, partner at law firm Fitzpatrick, Cella, Harper & Scinto, said he wouldn’t expect Teva to pay a 25 percent royalty rate when it enters the market, because Actavis won’t be paying any royalties beyond its 180 day-day exclusivity period.

Conde said given that Shire’s patents expire in 2021 and 2024, Teva may be happy with deal because the company is entering the market several years before it may have otherwise expected.

“But it’s hard to make generalisations,” he said.

Teva could potentially enter the market before the 180-day period ends by selling authorised generics, which would mean paying Shire to sell the latter’s products.

Companies might agree to this if they have difficulty making a product, but “Teva has some of the best chemists”, said Ralph Loren, partner at Edwards Wildman Palmer LLP.

Actavis and then Teva will be competing for lucrative Intuniv revenues, which totalled $288 million in 2012, according to Shire’s annual report.

The first generic entering the market typically takes about 50 percent of a drug’s market share within the first six months, said Loren, with this figure soon rising to 80 percent but which is shared between the two generics.

“This is when the real fight starts,” he said.

Brands can still make sizeable sales once generic rivals are selling products, Loren noted, owing to brand loyalty and worries that people might have adverse reactions to non-active compounds in the generic drugs, which don’t have to be completely the same as the original drug’s.

The US Food and Drug Administration is yet to approve the Teva deal.

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