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Eli Lilly and Company (LLY - Analyst Report) was dealt a legal blow when the judge in the English High Court ruled in favor of generic player Actavis (ACT - Analyst Report) in a patent infringement case on its oncology treatment Alimta.

Actavis is looking to sell certain alternative salt forms of Eli Lilly’s therapy in the U.K. and certain other European nations following the expiry of Alimta compound patents next year. According to the verdict issued by the court the vitamin dosage regimen patents related to Alimta would not be infringed by Actavis in such a scenario.

Further patents on Eli Lilly’s Alimta are valid till 2021 in the U.K. The court ruling also said that Actavis would not infringe Alimta's vitamin dosage regimen patent prior to the 2021 patent expiry. The court granted corresponding declarations against Eli Lilly on vitamin dosage regimen patents related to Alimta in France, Italy and Spain. Eli Lilly intends to appeal against the decision. Eli Lilly said that a German court had ruled in its favor earlier in the year regarding infringement of Alimta's vitamin dosage regimen patent.

Eli Lilly is facing patent related challenges on Alimta from many other companies. Alimta, which recorded sales of $632 million (up 2%) in the first quarter of 2014, faces competition from many players including Roche’s (RHHBY - Analyst Report) Tarceva in the oncology space.

Eli Lilly, a large cap pharma stock, carries a Zacks Rank #3 (Hold). The company’s top line is under pressure due to the genericization of key products like Zyprexa, Cymbalta and Evista. Consequently, the pipeline at Eli Lilly must deliver. The company is also looking to counter the challenge of genericization by entering into deals/making acquisitions.

Allergan (AGN - Analyst Report) is an example of a better ranked stock in the large cap pharma space with a Zacks Rank #1 (Strong Buy).

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