Auxilium Pharmaceuticals, Inc.
) and FCB I LLC recently filed a patent infringement lawsuit
) and its subsidiary, Watson Laboratories, Inc. which is looking to
launch a generic version of Auxilium Pharma's 1% testosterone gel,
Testim is the lead product at Auxilium Pharma. Testim sales came
in at $207.9 million in 2011, accounting for 78.6% of the company's
revenues. Testim's prescription share of the gel market was 20% in
December 2011. However, the product faces stiff competition from
) AndroGel. Testim is facing additional competition in the form of
) Fortesta and
The testosterone gel market will become even more competitive
from 2015 when generic versions of AndroGel are scheduled to enter
the market. The availability of a cheaper generic testosterone gel
product could impact Testim's market share as well as its formulary
The filing of the patent infringement lawsuit within 45 days
from the date of receipt of notice from Watson is in line with our
expectations. This will ensure that the FDA cannot grant final
approval to Watson's generic for up to 30 months or the court's
decision, whichever is earlier.
We note that Auxilium Pharma is leaving no stone unturned to
drive Testim sales. The company recently signed a co-promotion
) for Testim in the U.S. Following the announcement of the Glaxo
co-promotion agreement, Auxilium Pharma increased its revenue
guidance based on higher Testim revenues and trimmed its net loss
We currently have a Neutral recommendation on Auxilium Pharma,
which carries a Zacks #3 Rank (short-term 'Hold' rating).
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