Recently, United States District Court for the District of New
Jersey dealt a blow to
) when it ruled that a patent (6,598,603) protecting Pulmicort
Respules (budesonide inhalation suspension) in the US is invalid.
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Additionally the court also ruled that the generic companies
involved in the case, including
) did not infringe another patent (7,524,834) related to
Pulmicort Respules in the US. AstraZeneca intends to appeal
against the verdict.
We note that Pulmicort Respules is used as a maintenance therapy
to control and prevent asthma symptoms in children between 12
months and 8 years of age. Pulmicort Respules generated US sales
of $136 million in 2012.
Since 2009, AstraZeneca has an agreement with
Teva Pharmaceutical Industries Limited
), whereby it has allowed the latter to commence sales of its
generic version of Pulmicort Respules. AstraZeneca continues to
sell Pulmicort Respules, even after the licensed entry of Teva's
AstraZeneca believes the launch of generic versions of Pulmicort
Respules will not have any impact on its revenue guidance for
2013. Revenues are expected to decline in a mid-to-high,
single-digit range from 2012 levels (at constant currency basis).
However, it will have an impact on royalties received from Teva,
which had an annualized value of approximately $260 million in
2012. For 2013, AstraZeneca expects core earnings to decline
significantly more than revenue.
Generic competition has adversely impacted AstraZeneca's revenues
over the past few quarters. This has put significant pressure on
AstraZeneca, a large cap pharma stock, carries a Zacks Rank
) is favorably placed in the large cap pharma space with a Zacks
Rank #2 (Buy).