The motive behind Cephalon's (CEPH-$65.00) recent patent-infringement lawsuits is clear: litigate to slow the market entrance of cheaper copycat versions while it continues to transition patients from its older narcolepsy drug Provigil (modafinil) to Nuvigil. Cephalon derived 51 percent of total sales, or almost $925 million, from its Provigil franchise in 2008.
However, the clock winding down prior to any judicial decision(s) is an overhang for Cephalon — and could rip apart the planned Provigil to Nuvigil entrenchment campaign: cheaper copycats of Provigil will flood U.S. pharmacy shelves come April 2012 — just about the time both Teva Pharmaceuticals and Mylan Labs could decide to launch “at-risk” (liable for damages if court invalidates their patent challenges) copies of Nuvigil, alongside their legal introductions of Provigil.
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Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.