) recently announced that three patents protecting its
cholesterol management drug, Crestor (rosuvastatin) were rendered
invalid by the Federal Court of Australia. The three patents
including a formulation patent were set to expire by 2020-21. The
patents were challenged by companies like Apotex, Ascent Pharma
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AstraZeneca expects that the Australian Federal Court's verdict
will not impact its 2013 guidance of mid-to-high, single-digit
revenue decline. In 2012, Crestor generated sales of
approximately $350 million in Australia.
The company also noted that the decision by the Australian
Federal Court does not affect the validity of patents in the rest
of the world. We remind investors that in Dec 2012, the Court of
Appeals for the Federal Circuit had maintained an earlier ruling
that the US substance patent (RE37, 314) related to Crestor is
valid. The '314 patent is set to expire in 2016. However, Crestor
is already facing generic erosion in Canada.
Generic competition has adversely impacted AstraZeneca's revenues
over the past few quarters. This has put significant pressure on
the company. Additionally, there is increasing uncertainty
regarding Crestor due to the entry of generic versions of
) Lipitor in Nov 2011. The company's much hyped antiplatelet
drug, Brilinta's performance has remained lukewarm. AstraZeneca
is looking to combat the generic threat through deals and
acquisitions and cost cutting measures.
AstraZeneca, a large cap pharma stock, carries a Zacks Rank #3
Eli Lilly and Company
) currently looks more attractive in the large cap pharma space,
with a Zacks Rank #2 (Buy).