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Clarinex producer sues over generics

The Largo company that wants to make the generic version is not discouraged by the patent suit against it.

By KRIS HUNDLEY
Published October 11, 2006

A Largo company's bid to enter the generic drug market with a version of the popular allergy medication Clarinex has been at least temporarily blocked by a lawsuit. And any future rewards may have to be shared with a slew of competitors.

Schering-Plough Corp., which makes the brand-name drug, has sued GeoPharma Inc. and its Belcher Pharmaceuticals subsidiary in federal court in New Jersey for patent infringement. The suit is tied to Belcher's June 21 filing with the U.S. Food and Drug Administration for a generic version of Clarinex 5-milligram tablets.

Schering's lawsuit also names a dozen other pharmaceutical companies that made FDA filings for generic Clarinex on the same date as GeoPharma's Belcher.

The large number of companies competing to offer a lower-cost allergy remedy is little surprise. Schering said that its U.S. sales of Clarinex last year reached $325-million. Generic manufacturers who are first to file an abbreviated new drug application with the FDA get exclusive rights to produce the generic for 180 days. If no company gets the exclusive, competitors can do little but cut prices to capture the market, paring profit.

GeoPharma's chief executive, Mihir Taneja, said he was shocked to learn that so many companies were scrambling to make a generic Clarinex. But he dismissed Schering's legal action as just part of the expensive and time-consuming process of bringing a generic to market.

"It behooves Schering to sue because they're making $1-million a day on the drug, but we feel confident of our FDA filing," Taneja said. "This is all part of our long-term plan of building a substantial generic business."

Pharmaceuticals currently account for less than 5 percent of GeoPharma's revenues, with the company's core business being contract manufacturing and distribution of branded products. Last year, the publicly traded company had net income of $1.8-million, or 14 cents a share, on sales of $49.7-million. On Tuesday, its stock closed at $3.56, down 38 cents.

GeoPharma and the other defendants in Schering's lawsuit were taking advantage of the fact that the drug giant's exclusive patent on one version of Clarinex expires in June 2007. The competitors claim that their generics are bioequivalent to the brand but do not infringe upon Schering's patent.

By suing, Schering hopes to delay the onrush of cheaper competitors, although the drug giant has also said it would be producing its own generic version of the drug.

By law, if Schering's complaint is not resolved by the court within 30 months, the FDA can approve the generic filings and the companies are then free to launch their products. If the court rules in Schering's favor at a later date, the competitors could be held liable.

Taneja, who said his company plans on manufacturing its generic in Pinellas County, said the FDA filing - and Schering's response- put GeoPharma in the big leagues.

"For a small organization like ours, this is a tremendous feat," he said of the FDA filing. "It allows us to start operating in the same arena as larger pharmaceutical companies. And in the drug industry, 30 months is a blink of an eye."

Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.

[Last modified October 10, 2006, 23:34:20]