Takeda sues to stop generic drug makers in US

By Michiyo Nakamoto in Tokyo

Published: October 22 2003 13:17 | Last Updated: October 22 2003

13:17

Takeda, Japan's largest pharmaceuticals group, has filed lawsuits in

the US against generic drug makers in the second such action in the

past three months by Japanese groups trying to prevent cheaper

versions of their patented drugs penetrating one of their most

profitable markets.

Takeda has taken legal action against Mylan, one of the largest

generic drug makers in the US; Watson, a US generic group; and

Ranbaxy Laboratories of India following moves by the three groups to

seek Food and Drug Administration approval to make generic versions

of Actos, Takeda's blockbuster diabetes drug.

Takeda's move follows that of Daiichi Pharmaceutical, one of Japan's

leading drugs groups, which also took legal action against Mylan

over Levaquin, its best-selling antibiotic.

Eisai, another large producer, is also expected to take legal action

after generic drugs companies applied this month to launch versions

of two of its best-selling drugs in the US.

Japanese pharmaceutical groups have become increasingly dependent on

the US market to make up for sluggish sales in their home market.

The US provides Takeda with 70 per cent of its group revenue,

including joint venture sales.

The action of generic drugs companies "is one of the biggest

concerns for drug makers because the US government is re-considering

its health policy," a Takeda representative said.

US sales of Actos, which has patents that are valid until 2011, were

$1.13bn last year, or nearly 15 per cent of Takeda's overall drug

sales of Y928bn.

But the threat to Daiichi is likely to be more serious, in part

because Takeda's patent appears to be more robust and Daiichi is

more dependent on Levaquin.

Levaquin is believed to generate between 40 per cent and 50 per cent

of Daiichi's operating profits at a time when the company's drugs

pipeline looks thin.

If Mylan is allowed to launch a generic version of Levaquin, "even

if all of the products in Daiichi's pipeline are commercialised,

there is nothing that can cover for Levaquin's loss", said Fumiyoshi

Sakai, pharmaceuticals analyst at Deutsche Bank in Tokyo.

Some analysts believe Daiichi has a strong case.

Daiichi's patent, which runs to 2010, "clearly satisfies both

conditions of usefulness and innovation," said Mitsuo Ohmi,

pharmaceuticals analyst at JP Morgan in Tokyo.

"Since this is a court case, we cannot predict the outcome, but we

believe the patent will be defended," said Mayo Mita,

pharmaceuticals analyst at Morgan Stanley in Tokyo.

Philip Hall, at Credit Suisse First Boston, also believes Daiichi

will prevail but warns that "if they lose, they are in serious

trouble."

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