Impax Laboratories, Inc. (IPXL - Free Report) and Teva Pharmaceuticals USA, Inc., a wholly owned subsidiary of Teva Pharmaceutical Industries Limited (TEVA - Free Report) recently announced that they have settled a patent infringement lawsuit related to Concerta.
Impax and Teva entered into a settlement agreement with Johnson and Johnson’s (JNJ - Free Report) Janssen Pharmaceuticals, Inc. and ALZA Corporation. ALZA and Janssen had filed a patent infringement lawsuit against Impax in November 2010.
Impax and Teva are looking to launch their generic version of Concerta (18 mg, 27 mg, 36 mg, and 54 mg). Concerta is approved for the treatment of attention deficit hyperactive disorder in children six years of age and older, adolescents and adults up to the age of 65.
Per the terms of the settlement agreement, Impax and Teva may sell their generic version of Concerta from July 14, 2013 or earlier in certain cases. Concerta sales (both branded and generic) in the US, as per Wolters Kluwer Health, during the 12 months ended July 2012 were about $1.2 billion. Currently, an authorized generic version of Concerta is marketed by Watson Pharmaceuticals, Inc.
We note that Impax is yet to gain US Food and Drug Administration (FDA) approval for its generic version of Concerta. Once the generic version is approved, Teva will commercialize the product as per the terms of its agreement with Impax.
Impax’ agreement with Teva covers generic versions of 10 controlled-release generic pharmaceutical branded and over-the-counter (OTC) products. These products represent 18 different product/strength combinations.
We currently have a Neutral recommendation on Impax. The stock, however, carries a Zacks #2 Rank (short-term ‘Buy’ rating).