The top 10 patent losses of 2015

Print 18 December 2014
Tracy Staton, FeircePharma

We have bad news and good news about patent expirations next year. The bad? When you tot up the billions of sales at risk of patent expiration in 2015, the result is $44 billion, the biggest number since the debacle of 2012. That year, $53 billion worth of drugs fell off patent--and many drugmakers are still reeling.

But in 2015, generics are expected to take a much smaller bite from the drugs losing exclusive access to their respective markets. That's because several of the big expiries involve biotech drugs. Even if biosimilar versions of these meds--Amgen's ($AMGN) Neulasta, for instance--do make it to market in the U.S. next year, their impact on sales is likely to be limited. According to EvaluatePharma, only $16 billion in sales will actually be lost to patent expiration next year. That's way less than half.

That's because biosimilar drugs may not be automatically substitutable for the brands they're seeking to replace. There's a battle going on over this exact issue: Biosimilar makers want their drugs to be labeled with the same generic names as the brands; branded drugmakers say biosims should carry their own unique names.

If the biosim makers win, their drugs will more easily substitute for brands, digging deeper into brand sales when patents expire. If the unique-name advocates prevail, doctors will have to prescribe biosimilars specifically, and brands will be better insulated.

"With forecasts now to 2020, we have an extended view of how equity analysts are modeling the impact of biological patent expiries and the subsequent entry of biosimilar products," Evaluate Pharma said in a recent report. "[T]hey continue to expect a softer landing, post-patent expiry, and limited biosimilar substitution.

"It seems future metaphorical patent cliffs are being transformed into much more manageable rolling hills."

And for some of these first few biologics going off patent, the substitution issue won't apply--because biosimilar meds aren't even waiting in the wings. AstraZeneca's ($AZN) Synagis, for instance, may lose patent protection next year, but a biosimilar from iBio is still in preclinical testing.

While next year's sales-at-risk number may be good news for biologics makers--and the pharma industry in general--it doesn't soften the blow for several companies in particular. Some of the blockbusters set for generic competition in 2015 are regular old small-molecule meds. Take Bristol-Myers Squibb ($BMY) and Otsuka's antipsychotic drug Abilify. It accounted for $2.3 billion of Bristol-Myers' sales in 2013, about 14% of its total for the year. For Otsuka, the impact is even larger, with Abilify making up a full quarter of its sales.

And then there's Lantus, the basal insulin treatment from Sanofi. It could be headed for a quick slide--just not immediately. It's not an easy-to-copy product, but Boehringer Ingelheim and Eli Lilly ($LLY) have already won approval for their biosimilar version in Europe, and the two companies are raring to go in the U.S.

But though Sanofi's U.S. patent on Lantus expires in February, the French drugmaker sued Lilly and Boehringer for patent infringement under the Hatch-Waxman Act. That lawsuit triggered an automatic 30-month stay on copycat launches, which stands to keep Lantus copies off the market till June 2016. Sanofi will be scrambling next year to build sales for some follow-up diabetes products, hoping to soften the blow when the lawsuit is resolved.

Meanwhile, there's Teva Pharmaceutical Industries ($TEVA) and its top-selling drug Copaxone. The multiple sclerosis treatment's exclusivity actually expired earlier this year, thanks to a court decision invalidating Teva's September 2015 patent. Would-be copycats like Mylan ($MYL) said they were poised to launch their versions. But Teva appealed to the Supreme Court, which agreed to hear its case. Teva also reminded the generics makers that if they launched and the high court ruled against them, Teva could collect two times their sales in damages. So far, no generic has yet launched. The reprieve will definitely end when the patent expires in September, however--if not sooner.

We should mention a couple of drugs that would have appeared on this list, had courts not intervened. Novartis ($NVS) won a patent fight over Gleevec, its blockbuster blood-cancer treatment, putting off potential biosimilars till 2016. On the other hand, GlaxoSmithKline ($GSK) lost a patent dispute involving its cardiovascular pill Lovaza, derived from fish oil; generics hit the market earlier in 2014.

In all, the 10 drugs on this list represent more than $32 billion in global sales. The patent expirations we cite affect only U.S. sales directly, however. Some of the drugs have already lost patent protection in Europe; others have more exclusivity to come. We gathered information on sales and patents from the companies' securities filings and annual reports; the FDA's Orange Book; patent expiration listings from pharmacy benefits managers Catamaran, Express Scripts and Community Catalyst; and EvaluatePharma. 

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