Zacks_Analysts' Blog : Watson Entangled in Legal Dispute - Analyst Blog

The legal tussle between Watson Pharmaceuticals Inc. (WPI) and Shire plc (SHPGY) intensified, with the latter filing a patent infringement case against Watson Pharma relating to Vyvanse. Vyvanse is indicated for the treatment of attention deficit hyperactivity disorder (ADHD) in children aged 6 to 17 years and adults.

The lawsuit comes in response to the  abbreviated new drug application (ANDA) filed by Watson Pharma with the US Food and Drug Administration (FDA) to market a generic version of Vyvanse.

We note that the marketing exclusivity for Vyvanse expires in February 2012, under the Hatch-Waxman Act. By filing a patent infringement lawsuit, Shire has ensured a 30-month stay by the FDA. Consequently, the ANDA cannot be cleared by the regulatory body before August 23, 2014 or until a court ruling, whichever is earlier.

According to IMS Health, Vyvanse sales amounted to $1.1 billion, for the twelve months ended April 30, 2011.

Separately, Watson Pharma announced that the United States Court of Appeals for the Federal Circuit reaffirmed the February 2011 decision of the United States District Court for the Southern District of Florida, regarding the company’s generic versions of Mucinex (guaifenesin), Mucinex D (pseudoephedrine/guaifenesin), and Mucinex DM (dextromethorphan HBr/guaifenesin). The court ruled that Watson Pharma’s generic drugs do not infringe Reckitt Benckiser Group plc’s (RBGPY) patent for Mucinex line of products.

Watson Pharma had filed three ANDAs in 2009 for Mucinex line of products.

Moreover, last month, Watson Pharma announced the filing of ANDAs with the FDA to market its generic version of GlaxoSmithKline plc’s (GSK) Avodart, indicated for the treatment of benign prostatic hyperplasia (BPH), and Novartis AG’s (NVS) Pataday 0.2%, indicated for the treatment of ocular itching associated with allergic conjunctivitis.

Both Glaxo and Novartis challenged the applications. Since both companies filed a suit within 30 days of the ANDA filing, the FDA cannot approve Watson Pharma’s generic Avodart and generic Pataday until November 17, 2013 and October 29, 2013, respectively, or until the court ruling, whichever is earlier.