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Avanir Pharmaceuticals, Inc. (AVNR - Analyst Report) recently entered into a settlement agreement with Actavis Inc. (ACT - Analyst Report) to resolve their patent litigation regarding Neudexta. Actavis had filed an abbreviated new drug application (ANDA) to get its generic version of Avanir’s Nuedexta approved.

However, with the litigation being settled, Actavis can now sell its generic version of Nuedexta on Jul 30, 2026 or before under certain circumstances. Avanir and Actavis have also filed for the dismissal of the patent litigation.

We remind investors that in Aug 2013, Avanir settled its Neudexta patent litigation with Novartis' (NVS - Analyst Report) generic arm Sandoz. Meanwhile, three other companies, including Impax Laboratories, Inc. (IPXL - Snapshot Report), have also filed ANDAs for their generic versions of Nuedexta. Litigation against these ANDA filers is in progress.

We note that Nuedexta was launched in the U.S. in Jan 2011 for the treatment of pseudobulbar affect (PBA). Net Nuedexta revenues grew 15.2% sequentially to $19 million in the third quarter of fiscal 2013 ended Jun 30.

In Jun 2013, Avanir received approval for Nuedexta in the EU for the treatment of patients suffering from PBA. The marketing application was based on comprehensive data from phase III studies of Nuedexta in patients with PBA, plus data from longer-term safety studies.

Avanir expects to report top-line data from the PRIME study in the fourth quarter of calendar 2013. This study is being conducted to evaluate the efficacy of Nuedexta for the treatment of central neuropathic pain in multiple sclerosis.

This drug is being studied for two additional indications, namely, agitation in Alzheimer's disease (phase II), and levodopa-induced-dyskinesia in Parkinson's disease (phase II).

Avanir currently carries a Zacks Rank #3 (Hold). Currently, Actavis looks better positioned with a Zacks Rank #2 (Buy).

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