NEW YORK (AP) — A federal court overturned two of the
patents on Cephalon Inc.'s painkiller Fentora, according to Cephalon and Watson
Pharmaceuticals Inc., which is challenging the patents.
The ruling could allow competitors to start selling cheaper
generic versions of the drug soon.
After the markets closed on Friday, Cephalon said the U.S.
District Court for the District of Delaware ruled in favor of Watson Pharmaceuticals
Inc., which is challenging three of the patents supporting Fentora. Watson said
the court found that two of the patents were not valid. The court has not ruled
on the third patent.
Cephalon, of Frazer,
Pa., said it will review the
court's ruling and may file an appeal. Watson, of Morristown, N.J.,
said Monday that it cannot launch its generic version of Fentora until the
court makes a ruling on the third patent.
Fentora, or fentanyl tablets, is used to treat extreme pain
in cancer patients. Cephalon reported $136.6 million in U.S. sales of Fentora
in 2010. Worldwide sales of the drug reached $181.6 million for the year, or
about 6 percent of the company's total revenue. Cephalon's top seller is the
sleep disorder drug Provigil, which brought in $1.12 billion in revenue last year.
The U.S.
patents on Fentora are set to expire in 2019.
The Food and Drug Administration approved Watson's generic
version in January. If Watson starts selling the product, other generic
drugmakers like Teva Pharmaceutical Industries Ltd. are likely to do the same.
As part of a legal settlement with Cephalon, Teva agreed not
to market its generic version of Fentora until October 2018. But it will be
allowed to bring the drug to market if another company does the same.
Collins Stewart analyst Louise Chen said Cephalon will raise
the price on brand-name Fentora and start selling its own generic version if
rivals reach the market. She said the company could keep as much as 70 percent
of Fentora sales if the strategy works. However Chen cut her price target to
$60 per share from $70.