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RULING ON LIPITOR MAY AFFECT INVESTOR REACTION TO NEXIUM CHALLENGE

October 28, 2005

An upcoming U.S. patent ruling on Lipitor could affect how investors react to a bid to market a generic version of AstraZeneca's ulcer drug Nexium, according to one analyst.
British drugmaker AstraZeneca said recently that Ranbaxy Laboratories is seeking FDA approval to market 20- and 40-mg capsules of generic Nexium (esomeprazole magnesium), which had 2004 sales of $3.8 billion.

"A decision is expected on Lipitor's '995 isomer patent, which could affect sentiment toward the potential strength of the Nexium isomer patent," wrote Merrill Lynch analyst Graham Parry in a recent research note.

A British court last week struck down the equivalent of Pfizer's '995 patent, which covers the form of atorvastatin that is sold as Lipitor (atorvastatin calcium), but upheld the equivalent of U.S. patent '893, a broad patent covering the range of atorvastatin compounds that includes Lipitor.

AstraZeneca has 45 days to file a patent lawsuit against Ranbaxy, which would automatically trigger a 30-month stay under the Hatch-Waxman Act. This would mean Ranbaxy would not be able to launch its product until either the expiration of the stay or a court ruling in favor of Ranbaxy.

Parry said he expects Ranbaxy to lose its bid, based on AstraZeneca's "robust" isomer patent. He added that even if Ranbaxy wins the suit, the earliest it could launch generic Nexium would be after the expiration of the 30-month stay, in June 2008.