Thursday, August 22, 2013

Patent Precipice at Pfizer

Through successful litigation, Pfizer (PFE-$28.16) has extended the patent for its sex drug Viagra (sildenafil) in the U.S. until October 2019. However, up to twenty generic manufacturers, including powerhouse Teva (TVA), are poised to market their own versions of the little blue pill in Europe and other global markets after international patents expired in June.

Worldwide sales totaled $945 million in 1H:2013 (4% of product sales), with half of this revenue coming from abroad.

Concerns have been expressed, too, by analysts that the drug could lose incremental sales here at home to a generic version of Pfizer’s proprietary treatment for pulmonary arterial hypertension, Revatio, which contains sildenafil as the active ingredient and lost marketing exclusivity in November 2012.

Albeit Pfizer is looking to mitigate the impact of generic competition by bringing to market new products, including treatments for auto-immune disorders, cardiology, and oncology, as demonstrated by Viagra, its portfolio of drugs at-risk of losing market exclusivity is high. Up to 35% of the $23.6 billion in sales derived from branded pharmaceuticals in 1H:13 is either currently battling an onslaught of cheaper alternatives or will soon face generic competition, including several best-selling drugs.

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.

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