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Actavis Files Patent Infringement Lawsuit

ACT

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Actavis, Inc. (ACT - Analyst Report) and Kissei Pharmaceutical Co., Ltd. recently announced the filing of patent infringement lawsuits against Sandoz and Hetero. Sandoz and Hetero are looking to launch their generic versions of Actavis/Kissei’s Rapaflo (4 mg and 8 mg), which is approved for the treatment of the signs and symptoms of benign prostatic hyperplasia (BPH).

With the patent infringement lawsuit being filed within the stipulated time period under the Hatch-Waxman Act, the FDA cannot grant final approval to the generic versions of Rapaflo before Apr 8, 2016 or the court’s decision whereby the patent is found invalid/not infringed, whichever is earlier.

Rapaflo is a key product in Actavis’ branded drugs segment. The company is currently working on strengthening its branded product portfolio and recently announced its intention to acquire Warner Chilcott plc for about $8.5 billion.

The Warner Chilcott acquisition will help strengthen Actavis’ position in the women’s health and urology markets. The company will also gain a presence in the gastroenterology and dermatology markets. Moreover, Actavis will gain a pipeline of 25 candidates including 15 targeting the women’s health market.

The successful completion of this deal will lead to the creation of a leading global specialty pharmaceutical company with combined annual revenues of about $11 billion. The combined company will hold the third position in the US specialty pharmaceutical market with annual revenues of about $3 billion. The deal is expected to close by the end of this year.

Actavis currently carries a Zacks Rank #3 (Hold). With fewer major patent expiries slated to occur in the next few years, we are encouraged by Actavis’ focus on building its branded portfolio.

At present, companies like Simcere Pharmaceutical Group and Santarus, Inc. look well-positioned. While Santarus is a Zacks Rank #1 (Strong Buy) stock, Simcere is a Zacks Rank #2 (Buy) stock.

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