Healthy Skepticism Library item: 7181

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Publication type: news

Turner S.
AstraZeneca to launch generic of its own heart drug: Sees 2006 earnings per share at low end of guidance range
Market Watch 2006 Nov 22
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB9F19203%2D1226%2D4F7C%2D871D%2D2B6247BCE92B%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

Abstract:

Anglo-Swedish pharmaceutical AstraZeneca said Wednesday that it has signed a deal to distribute a generic version of its heart drug, Toprol-XL, after a rival launched a copycat version of the drug, leading the company to forecast 2006 earnings at the low end of its previously stated range.
AstraZeneca signed the deal with Par Pharmaceuticals of the U.S. The companies will distribute and supply a 25 mg generic version of Toprol-XL.
AstraZeneca, the eighth-largest pharmaceutical company in the world by market capitalization, said that it decided to launch a generic version of Toprol-XL, which is used to treat angina, heart attacks and high blood pressure, after Novartis owned Eon Labs launched a 25 mg generic version of Toprol-XL on Tuesday.
“The move by Novartis triggers an inventory adjustment of $150 million by AstraZeneca, which will be charged against fourth-quarter earnings,” noted analysts at Enskilda.
AstraZeneca said that, including the $150 million, or 8 cents a share, charge related to one-off costs and inventory adjustments, it’s expecting earnings per share for 2006 at the lower end of its $3.85 to $3.95 guidance range.
Throughout 2006, the company has provided guidance to quantify the possible effect of a generic launch of Toprol XL.
At the third-quarter stage of 2006, the company said that the $3.85 to $3.95 earnings per share guidance range included 10 cents worth of earnings from Toprol XL.
The 25 mg version accounts for around 20% of AstraZeneca’s Toprol-XL sales in the U.S. Total Toprol-XL sales in 2005 were $1.7 billion, with around $1.3 billion of these sales generated in the U.S.
Sandoz received approval from the U.S. Food & Drug Administration to launch a generic version of Toprol-XL on August 1.
Applications for approval of generic Toprol-XL in the 50 mg, 100 mg and 200 mg doses are also pending with the FDA.
AstraZeneca is also currently involved in litigation with KV Pharmaceutical Company, Andrx Pharmaceuticals, Andrx Corp. and Eon Labs over its Toprol-XL patents after a U.S. Court ruled that patents for extended release version of Toprol-XL were invalid and unenforceable.
The patent protecting Toprol-XL expires September 2007.
AstraZeneca shares lost 0.8% in morning London trading, adding to recent declines made after the company revealed further disappointing news on its product pipeline.
Since October 25 when the company said that it intended stop development of experimental stroke drug, NXY-059, the shares have declined 14%.
A Democrat win in the U.S. Congress in the interim also raised concerns about the sustainability of prescription pricing levels.