Encouraging news flowed in at
) when it obtained a temporary injunction against the U.S. launch
of Hanmi Pharmaceutical's esomeprazole strontium. Esomeprazole
strontium was approved by the U.S. Food and Drug Administration
(FDA) in Aug 2013.
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We remind investors that in Jun 2013 AstraZeneca had entered into
an agreement with Hanmi Pharma and Amneal Pharmaceuticals (the
U.S. marketing partner of Hanmi Pharma), to resolve patent issues
related to AstraZeneca's heartburn drug, Nexium (esomeprazole).
As per the terms of the agreement, Amneal Pharma and Hanmi Pharma
accepted that two of AstraZeneca's patents (5,714,504 and
5,877,192) protecting Nexium in the U.S. are valid. The consent
judgment provides that Hanmi's esomeprazole strontium product
does not infringe these patents based on the District Court's
claim construction issued in Dec 12, 2012.
AstraZeneca filed a Notice of Appeal in the U.S. Court of Appeals
for the Federal Circuit seeking reversal of critical aspects of
the District Court's Dec 2012 construction.
Nexium generated sales of approximately $2 billion in the first
half of 2013, accounting for approximately 15% of AstraZeneca's
total revenues. However, the company expects Nexium sales to
decline from 2014 onwards due to generic competition. We remind
investors that AstraZeneca is entangled in patent litigation
related to Nexium with several generic companies including
). We believe the sooner-than-expected entry of generics will put
additional pressure given that the company is already witnessing
plunging revenues due to generic competition for several key
drugs including Seroquel.
AstraZeneca carries a Zacks Rank #3 (Hold). At present, companies
) look well-positioned with a Zacks Rank #2 (Buy).