By Anuradha Ramanathan and Vidya L Nathan
BANGALORE, Oct 9 (Reuters) - Medicines Co's ability to protect sales of its anti-clotting drug, Angiomax, has taken center stage after the company filed a patent suit against Teva Pharmaceutical Industries Ltd.
Teva, the world's largest generic drugmaker, could launch an Angiomax generic as early as this month.
Angiomax's patent will expire in March 2010, about four years earlier than if Medicines Co had not missed the deadline -- by a day -- to file for extended patent exclusivity.
Combined with a dismal launch of its blood-pressure drug, Cleviprex, and the discontinuation of a late-stage trial for the antiplatelet agent Cangrelor, the possible loss of Angiomax revenue has brought uncertainty to the stock.
Can Medicines Co, whose shares have more than halved in value in the last one year, withstand the generic threat?
RESILIENT TO GENERICS
'The Angiomax business will be more resilient to generic competition than many believe. It is a difficult and expensive drug to make,' Leerink Swann analyst Joseph Schwartz said.
'We wouldn't expect (the generic) competitor to knock the price down very much,' said Schwartz, who has an 'outperform' rating on Medicines Co.
He sees Angiomax sales declining only about 20 percent in 2011 and 2012 -- more optimistic than most analysts' expectations.
In 2008, Angiomax sales totaled $334.2 million, bringing in nearly 96 percent of the company's total revenue.
The company also has a strong cash position, with cash, cash equivalents and available for sales securities totaling $185.8 million as of June 30.
'(Medicines Co) has a good amount of cash -- around $3.50 a share. They have been prudent with how they have deployed that and have made a couple of acquisitions on the cheap,' Schwartz said.
RISKY BUSINESS
'The problem with Medicines is that they have a whole bunch of drugs and drug candidates, (but) only one that has worked very, very well so far, which they have a patent problem with,' Wedbush Morgan analyst Duane Nash said.
Nash sees the entrance of an Angiomax generic eating away nearly 40 percent of the drug's revenue.
'At this point, I think the risk outweighs the potential rewards. So I wouldn't encourage people to buy it at this point,' Nash said.
The company's future now depends on the type of product they will be able to acquire, said RBC Capital Markets' Jason Kantor, who has a 'sector perform' rating on the stock.
(Editing by Anne Pallivathuckal) Keywords: MEDICINESCO/BUYORSELL (anuradha.ramanathan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800: Reuters Messaging: anuradha.ramanathan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BANGALORE, Oct 9 (Reuters) - Medicines Co's ability to protect sales of its anti-clotting drug, Angiomax, has taken center stage after the company filed a patent suit against Teva Pharmaceutical Industries Ltd.
Teva, the world's largest generic drugmaker, could launch an Angiomax generic as early as this month.
Angiomax's patent will expire in March 2010, about four years earlier than if Medicines Co had not missed the deadline -- by a day -- to file for extended patent exclusivity.
Combined with a dismal launch of its blood-pressure drug, Cleviprex, and the discontinuation of a late-stage trial for the antiplatelet agent Cangrelor, the possible loss of Angiomax revenue has brought uncertainty to the stock.
Can Medicines Co, whose shares have more than halved in value in the last one year, withstand the generic threat?
RESILIENT TO GENERICS
'The Angiomax business will be more resilient to generic competition than many believe. It is a difficult and expensive drug to make,' Leerink Swann analyst Joseph Schwartz said.
'We wouldn't expect (the generic) competitor to knock the price down very much,' said Schwartz, who has an 'outperform' rating on Medicines Co.
He sees Angiomax sales declining only about 20 percent in 2011 and 2012 -- more optimistic than most analysts' expectations.
In 2008, Angiomax sales totaled $334.2 million, bringing in nearly 96 percent of the company's total revenue.
The company also has a strong cash position, with cash, cash equivalents and available for sales securities totaling $185.8 million as of June 30.
'(Medicines Co) has a good amount of cash -- around $3.50 a share. They have been prudent with how they have deployed that and have made a couple of acquisitions on the cheap,' Schwartz said.
RISKY BUSINESS
'The problem with Medicines is that they have a whole bunch of drugs and drug candidates, (but) only one that has worked very, very well so far, which they have a patent problem with,' Wedbush Morgan analyst Duane Nash said.
Nash sees the entrance of an Angiomax generic eating away nearly 40 percent of the drug's revenue.
'At this point, I think the risk outweighs the potential rewards. So I wouldn't encourage people to buy it at this point,' Nash said.
The company's future now depends on the type of product they will be able to acquire, said RBC Capital Markets' Jason Kantor, who has a 'sector perform' rating on the stock.
(Editing by Anne Pallivathuckal) Keywords: MEDICINESCO/BUYORSELL (anuradha.ramanathan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800: Reuters Messaging: anuradha.ramanathan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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