Good news for Novartis as judge blocks generic competitors
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Good news for Novartis as judge blocks generic competitors

Pharmaceutical giant Novartis got a win in the courts and on the market this month, as a judge ruled that generic competitors to its top-selling multiple sclerosis medicine Gilenya can’t make their way to market – at least, in the US. And until an existing patent dispute is settled. This is a major win for Novartis, which sees billion of dollars in revenue from this drug, and has been under threat from generic competitors for a while.

Novartis’s share price has appreciated by 21% so far year to date

Novartis June 27

Source: Yahoo Finance

Novartis sought an injunction to stop generic medicine makers like Dr. Reddy’s Laboratories, Mylan Pharmaceuticals, Torrent Pharma and Aurobindo Pharma from launching their own versions of Gilenya in the US while a patent dispute continues. The judge presiding upheld this request, ruling that the damage Novartis could face outweighed the benefits the generic-makers in question could reap.

US District Judge Leonard P. Stark wrote a nine-page opinion, released Monday, where he argued: "Defendants stand to lose the opportunity to earn ... $50 million collectively by not being able to compete over approximately the next year, whereas Novartis will irreparably lose a market in which they sell approximately $1.8 billion of drugs each year. To me, that balance clearly favours Novartis.”

The patent case which remains unresolved concerns a patent over how the drug is dosed. Novartis says this patent – which remains in force until 2027 – should maintain its exclusivity until that date. A trial on this matter is still pending. But until then, Novartis is safe to keep selling a drug that bought in $3.3 billion last year alone.

Stark concluded: “Novartis has met its burden to demonstrate a likelihood of success on the merits. The public has an interest in protecting valid patent rights and in maintaining incentives for the massive investments required for drug development.”

Disclosure

Dominion holds Novartis in its Global Trends Managed Fund.


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