Approval of Teva's [TEVA] olanzapine tablets is subject to the US District Court finding Lilly's [LLY] Zyprexa patent invalid. Furthermore, it is likely Teva will have to sit out a 180-day exclusivity period awarded to the first ANDA applicant. However, continued delays in the judge's decision make the outcome increasingly uncertain for Lilly.
Teva Pharmaceuticals has announced that the US Food and Drug Administration (FDA) has granted tentative approval of its Abbreviated New Drug Application (ANDA) for a generic version of Eli Lilly's Zyprexa (olanzapine) tablets.
Launched in 1996, Lilly's Zyprexa is the leading atypical antipsychotic on the global market, generating sales of $4,420 million in 2004. Initially launched for schizophrenia, the drug has since gained approval for the treatment of acute bipolar mania and bipolar maintenance, thus allowing the Lilly to differentiate its product from those of competitors. Additional labels (and drug delivery methods) have helped Zyprexa to achieve continued 2004 revenue growth globally of 3%.
However, in 2004, US sales of the drug decreased by 8%, largely due to the ongoing concerns of potential weight gain and hyperglycemia. This has been further amplified by intense advertising by trial lawyers targeting Zyprexa patients.
Nevertheless, such concerns have done little to deter generic manufacturers who are keen to muscle in on olanzapine revenues. As such, Lilly is already embroiled in a complex legal battle over the validity of its Zyprexa patent, which is not supposed to expire until 2011.
If the court does find Zyprexa's patent to be invalid, it is likely that Teva will have to wait 180 days until the exclusivity period awarded to Ivax, the first generic company that sought permission from the FDA to launch its drug, ends.
Although it is expected that Zyprexa's patent will be upheld against generic challenges until its expiry in April 2011, the continued delays of the judge's decision make the outcome increasingly uncertain. Should the patent be found to be invalid, the loss of revenues from Zyprexa to generic manufacturers will be a devastating blow to Lilly, which has historically received over a third of its total ethical sales from the drug. That said, even if the patent is upheld, continued concerns over side effects will likely mean a steady decline in Zyprexa's global sales, thus highlighting the need for Lilly to begin looking to alternative sources of revenues.