With patent expirations looming and already passing for some of the nation's bestselling name brand drugs, Big Pharma is facing major revenue challenges in 2012.
"Patents on a number of the largest-selling drugs will expire in late 2011 and 2012, which is increasing pressure on most branded drug companies at a time when the quality of the late-stage pipelines remains relatively weak," said Marie Fisher-Sabatie, vice president and senior analyst of Moody's Corporate Finance Group.
Here are five blockbuster name brand drugs facing patent expiration.
1. Seroquel. Seroquel, manufactured by AstraZeneca, lost its marketing exclusivity on March 26, 2012. In an article by CBS News, an analyst investor said the loss of the drug's patent could mean a loss of $4.3 billion for the company - nearly half of its total pretax profit. Despite disagreeable side effects, like weight gain and diabetes, the drug pulled in approximately $5.3 billion in revenue in 2010, and as a whole, AstraZeneca walked away with $33.3 billion. Experts agree the patent expiry shouldn't affect AstraZeneca too much; Seroquel is about 13 percent of the company's revenues. Still, the drug is "enormously profitable," said Berstein Research's Tim Anderson, in a meeting following the company's Q4 earnings call. "AZN faces many big patent expiries between 2010 and 2015, such as Seroquel (U.S. expiry early 2012), product with pretax margins greater than 80 percent," he said.
2. Lexapro. Lexapro, which is used to treat anxiety and depression, had a patent that expired on March 14, 2012. And, according to an article by the Rottenstein Law Group, the patent's expiration means the controversial drug is looking to become more widespread than ever. "That will leave the door open for other drug companies to sell Lexapro in generic form," the article read. It added the anticipated loss in revenue from Lexapro, which accounted for approximately 59 percent, or $2.8 billion, of Forest Laboratories' 2010 sales, has the company keeping investors apprised of new products it acquired to make up for the impending shortfall. "Forest has made a bundle on Lexapro - the company's $11 billion revenue is projected to drop by as much as one-fourth after the drug's patent expires," the article read. Lexapro also ranked 19th in sales in 2010, due largely to a growing demand for anti-depressants.
3. Plavix. Plavix, which belongs to the drug class blood-thinners or anti-platelets, is set to have its patent expire on May 17, 2012. It was deemed the second best-selling drug in the world after claiming $9.4 billion in global sales in 2010. The drug was discovered by French pharmaceutical Sanofi-Aventis and was co-developed with Bristol-Myers Squibb. It retailed for approximately $162 a month for consumers and raked in roughly $6.7 billion in U.S. sales in 2010, which equates to 34 percent of its total revenues of $19.5 billion, an article in DailyFinance reports. Sanofi confirmed sales of more than 2 billion euros in 2010, or approximately $2.7 billion, which was about 7 percent of its revenues. According to an article in the New York Times, the company said approval of other promising drugs is helping "cushion the blow" of cheaper generics once the patent has expired.
4. Singulair. Merck's Singular, which is used to treat oral asthma and allergies, was first cleared by the FDA in 1998 and has since seen consistent growth despite FDA warnings of depression and suicidal thoughts, according to an article in DailyFinance. In 2010, the drug saw worldwide sales of approximately $5 billion, or nearly 11 percent of Merck's total revenue. The drug is set to expire in August 2012, adding to the company's loss of blood pressure drugs Cozaar/Hyzaar, which have "seen sales slump by 41 percent in 2010 to $2.1 billion." Still, said pharmaceutical analyst Sophia Snyder, the company is one of the best positioned among pharma companies, "as the patent cliff nears...the company's diverse late stage pipeline and promising earlier stage candidates should offset Singulair patent expiry and support near and longer term growth."
5. Actos. Actos, a diabetes medication from Japan's Takeda, has a patent that expired in January 2011. However, the company did come to an agreement with Ranbaxy, Watson and Mylan, where the generic drug makers won't start marketing Actos until August 2012, according to an article in DailyFinance. Other drugmakers will enter the market with generic options 180 days later. "Over the first nine months ending December of its fiscal 2010, Actos recorded sales of 293 billion yen," the article detailed, which translates into $3.58 billion, or 27 percent of its total revenue. The article noted sales were also affected by a sharp decrease in Prevacid sales, due to the loss of exclusivity in the U.S.
Follow Michelle McNickle on Twitter,