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Generic drug makers, Actavis plc (ACT - Analyst Report) and Mylan Inc. (MYL - Analyst Report), are gearing up to launch their generic versions of Pfizer’s (PFE - Analyst Report) Celebrex (celecoxib). Earlier this week, the United States District Court for the Eastern District of Virginia had ruled that the reissue patent for the drug, which was to expire on Dec 2, 2015 (including 6 months pediatric exclusivity), is invalid.

This clears the path for companies like Actavis, Teva (TEVA - Analyst Report) and Mylan among others (Lupin and Apotex) to launch their generic versions of Celebrex. Both Actavis and Mylan have issued press releases saying they intend to launch their generic versions of the drug in May 2014 provided the FDA grants final approval to their abbreviated new drug applications.

Mylan said that it believes it has shared exclusivity for the 100 mg, 200 mg and 400 mg strengths. Celebrex, a non-steroidal anti-inflammatory drug, is approved for the relief of the signs and symptoms of osteoarthritis, rheumatoid arthritis, ankylosing spondylitis, and for the management of acute pain in adults. Celebrex sales in the U.S. were $2.2 billion in 2013.

The entry of generic Celebrex, if launched in May 2014, would be a full 18 months before expected. Pfizer has been trying to block the entry of generics in May and intends to appeal the court ruling regarding the reissue patent.

Pfizer is already facing generic competition for several products in its portfolio including Lipitor, Norvasc and Zoloft. Additional patent expiries are expected in the coming years. The loss of patent exclusivity on blockbuster products will make it challenging for Pfizer to drive top-line growth. Pfizer, which currently expects earnings of $2.20 - $2.30 per share on total revenues of $49.2 billion - $51.2 billion in 2014 will most likely have to adjust its guidance if generic versions of Celebrex enter the market this year.

While Pfizer is a Zacks Rank #3 (Hold) stock, Actavis, Mylan and Teva are all better-ranked with all three being Zacks Rank #2 (Buy) stocks.

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