Glenmark Generics (Europe) Ltd (GGEL) has launched a generic version of Glaxo’s successful anti-malaria drug Malarone in the UK, following the revocation of Glaxo’s patent.

The High Court determined that Glaxo could not block the launch of generic atovaquone proguanil, with the presiding judge saying the case was “obvious”.

The drug brought Glaxo £17.76m in the UK in 2012, a sizeable market that Glenmark is set to undercut.

Malarone is indicated for the prevention and treatment of acute, uncomplicated p.falciparum malaria, especially in patients resistant to treatment. It is recommended by the UK’s Malaria Reference Laboratory.

The mosquito that transmits malaria is not found in the UK, but prevention and treatment in people travelling to tropical regions can be necessary.

Rahul Garella, Glenmark’s Senior Vice President Europe, said: “Atovaquone proguanil is a well-established treatment for malaria. Doctors, pharmacists and consumers, in particular travellers, need to be made aware that there is now a first-class quality generic option available which can offer a more competitive solution.”

GGEL is based in the UK and sells, directly and through distribution partners, in the UK, Ireland, Germany, the Netherlands, Denmark and Sweden, with more than 300 generic drugs approved for sale in Europe.

It is the European arm of Glenmark Generics Ltd (GGL), which aims to be a leading global supplier of generic drugs and active ingredients. GGL is a subsidiary of the Glenmark Pharmaceuticals group, based in India.

Nearly half a billion pounds will be cut from the NHS drugs budget as part of the QIPP savings agenda, according to a new DH report.

Forecasts included in The Quarter, a report which reviews NHS QIPP targets, predict that up to £477m will be saved from the prescribing budget by April 2013.

Savings will be generated by a number of treatments losing patent protection in 2011/12 allowing the NHS to purchase cheaper generic alternatives.

AstraZeneca’s Seroquel (quetiapine) and Pfizer/Eisai’s Aricept (donepezil) are two products used throughout the NHS which recently lost patent protection. Pfizer’s Lipitor (atorvastatin), one of the biggest components of NHS drugs expenditure, came off-patent in May and will also contribute to the savings.

The report shows that the NHS saved £1.2bn in the first quarter of the financial year and is on track to meet its £5bn savings target this year. Cutbacks on drugs spend are predicted to be the second biggest saving behind efficiencies coming from acute services.

The expected £477m savings is down on the £700m saved on the medicines bill the year before – when the NHS made £5.8bn of savings through the QIPP agenda.

As the era of blockbuster drugs draws to an end, the pharmaceutical industry is looking to fresh markets and new models of drug development while facing legislative changes as well as economic threats. Sarah Hanson looks at what lies ahead for the industry in 2012.

2012 looks set to be the year when pharmaceutical companies face their scariest outlook: peering over the brink of a patent cliff. Major pharmaceutical companies are realising that they can no longer rely on a broken business model that is dependent on blockbuster drugs, and are looking for alternative ways to maintain profits and cover the loss of revenues due to patent expiry. This throws up a host of commercial, legal and regulatory challenges.

Entering new markets
Major structural shifts are taking place in R&D and how intellectual property is financed, meaning that the life sciences sector is providing a rare bright spot in the pervading economic gloom. Over the last decade, there has been almost US$700bn worth of deals in the pharmaceutical sector, which remains one of the prime industries in terms of M&A activity. Now we are likely to be at the start of a fresh cycle of M&A activity in the industry, with a particular focus on emerging markets (BRIC, South-East Europe and Turkey) where the portfolios of many pharma companies remain weak.

Japan has enjoyed a particularly busy year in terms of pharmaceutical M&A: across all sectors, cross-border acquisitions by Japanese companies nearly tripled relative to 2010. Liquidity among Japanese pharma companies remains strong, as does demand for prescription medicines from an ageing population, enabling Japanese companies to enter into deals at a time of intense competition for intellectual property in the industry. In 2011 Takeda, the largest Japanese pharmaceutical company, completed its €9.6bn (debt-free, cash-free) acquisition of Swiss drug company Nycomed. On the back of this transformative deal, we expect the industry to undertake more M&A activity in Japan in 2012. Factors such as the economic climate, demography and the state of R&D pipelines should see more Asian acquisitions of European patented drugs.

Emerging markets also continue to receive significant life science private equity (PE) investment, with China and India gaining the most. Historically, the risk involved in R&D has led PE firms to avoid large pharma companies and the biopharma industry in general. However, recently some small deals have linked PE and venture capital with biotechnology, and we are seeing investment in a number of diverse projects in different life science areas. This growing trend is already playing out in Europe – according to the European Private Equity and Venture Capital Association, the total investment in life sciences in Europe increased from €3.4bn in 2009 to €5.7bn in 2010, while the total venture investment in life sciences accounted for 30% of the total investment in Europe in 2010. Such funding is likely to increase as the cash-rich life sciences sector is seen to be ’recession proof’.

A helping hand for R&D
Pharmaceutical companies looking to weather the storm of patent expiry on key products are also looking to diversify their pipelines and develop replacement products. With most companies struggling to make a return on high R&D costs pumped into prospective pipelines, additional support is vital.

In the UK, the Government hopes its new Patent Box legislation will give a welcome boost to research and development. When it comes into force in April 2013, the Patent Box will reduce UK corporation tax on patent profits to 10%, encouraging R&D activity and providing incentives for companies to retain intellectual property in the UK. This will make the UK competitive with other European countries such as Ireland, Switzerland and Hungary, which have had similar systems in place for years. While the existing system of R&D tax credits has given some relief for R&D expenditure, there has until now been no similar incentive for businesses to retain their IP in the UK once it has been created.

Legislation such as Supplementary Protection Certificates (SPCs) will also play a significant role in assisting companies facing the expiry of major patent portfolios and provide more protection for companies investing heavily in R&D. EU patent offices have long been able to grant SPCs where there has been a large gap for a company between filing a patent application and getting authorisation to market a drug. However, legal issues surround how SPCs apply to medicines that contain more than one active ingredient. In a landmark case in November 2011, the Court of Justice of the EU said that there is no reason why an SPC may not be granted for a single active ingredient that is specified in a patent where the marketing authorisation also contains other active ingredients. This (and other recent cases regarding SPCs) is likely to have further ramifications in battles between generic and pharmaceutical companies into 2012.

New legislation: help or hindrance?
New legislation coming into force will also have an impact on the pharma industry in the year ahead. Whether the expected IP and regulatory legislation will help or hinder pharmaceutical companies in this challenging climate remains to be seen.

A number of significant regulatory issues are being debated in Europe. A Directive is being developed to improve the EU pharmacovigilance system, simplify regulatory decision-making, provide a legal basis for more proactive pharmacovigilance by both regulatory authorities and the industry, and involve patients more closely in reporting adverse drug reactions. Though it was adopted in 2010, compliance is not compulsory until 2012. The legislation will bring about the most profound change to the legal framework since 1995, when the EMA was set up. The European Commission, EMA and Member States have been carrying out work to implement the legislation, but companies still lack clarity on many of the new obligations. It is likely that the new requirements will be introduced in phases beyond the original July 2012 implementation deadline.

At a time when social networking continues to grow and become part of the daily routine of many working lives, pharmacovigilance is particularly important. The pharma industry must recognise that social networking and reporting are taking on a rapidly-increasing significance in the marketing, discussion and exchange of information concerning drugs. There are pharmacovigilance obligations at all stages of the life cycle of a medicine and the process of drug monitoring; the pharmacovigilance system will need to take account of this, not least because the increasing use of social media also poses interesting questions around geographical legal jurisdiction.

Discussions continue about the introduction of a Directive that would require substantial changes to the regulation of clinical trials. In March 2010, the Chancellor of the Exchequer announced that the Government would review the UK’s implementation of the Clinical Trials Directive in order to reduce perceived gold-plating and to increase the proportionality of the system. The MHRA has stated that it intends to wait for the outcome of the European negotiations before reviewing and amending the UK legislation.
2012 may also herald significant changes in the way drugs are marketed. EFPIA in particular will be under the spotlight this year as the implications of amendments to the advertising of medicines become apparent. Currently, the advertisement for a medicine must be in line with the product’s Summary of Product Characteristics (SmPC). Hence off-label promotion is not allowed. EFPIA has approved an amended Code of Practice on the promotion of prescription-only medicines to, and interactions with, healthcare professionals.

The changes to the Code make allowance, for example, for the provision of a limited number of samples to healthcare professionals for a limited time (Art. 16).  Previously, following EU Directive 2001/83/CE, the provision of samples was not allowed (due to concern over inducement); but in accordance with national and/or EU laws and regulations, a limited number of medical samples may now be supplied on an exceptional basis and for a limited period. A reasonable interpretation of this provision is that each health professional should receive, per year, not more than four medical samples of a particular medicine that he/she is qualified to prescribe for two years after he/she first requests samples of that particular medicine.

A landmark year
Last year saw significant developments for the pharma industry – and for lawyers – which look set to continue through 2012. With deals such as Takeda’s acquisition of Nycomed in 2011, we expect the trend of commercial and economic power shifting eastward to continue. Increased diversification, coupled with regulatory hurdles, will set a challenge for the pharma industry. Whether companies will survive and thrive on this challenge remains to be seen as the year unfolds, but the structural upheaval felt as a result of life beyond the patent cliff is already being witnessed.

Sarah Hanson is a partner at CMS Cameron McKenna: the UK branch of CMS, a leading European provider of legal and tax advice.

The new patent relates to the molecule’s use in treating inflammation and related conditions such as arthritis and allergy.

A non-steroidal anti-inflammatory drug, Ampion has the potential to be used with millions of patients.

DA-DKP is a molecule produced by humans in response to injury, and is obtained from human serum albumin. Ampio anticipates that Ampion will be classified as a biologic.

“We believe that multiple inflammatory conditions might benefit from this biological drug,” said Dr. Vaughan Clift, Ampio’s Chief Regulatory Officer.

The company is testing two possible indications:

• The Ampion-In-Knee (AIK) clinical trial for the treatment of osteoarthritis of the knee, which includes a direct comparison to steroids.

• The IRB-approved clinical trial for the treatment of allergic rhinitis.

Dr. David Bar-Or, Ampio’s Chief Scientific Officer, commented on the drug’s new patent: “This is an important, composition of matter patent that complements the already extensive and robust portfolio of worldwide issued patents for Ampion.”

Ampio Pharmaceuticals specialises in developing new uses for previously approved drugs and new compounds.

Pharma companies can only obtain one Supplementary Protection Certificate (SPC) per patent, the EU Court of Justice (CJEU) has ruled.

The new ruling clarifies existing regulations, whose disputed application had led to uncertainty about the patent status of combination drugs and multivalent vaccines.

Pharma companies in the EU will now be less able to use SPCs to extend patent life by gaining additional exclusivity for altered products.

As a result, companies may see an increase in biosimilars and generics being released by competitors at the point of patent expiry.

According to the CJEU verdict, an SPC:

• can only be granted for active ingredients that are specified in the claims of the underlying patent

• is permitted for multi-ingredient products only if each ingredient is patent-protected

• can be granted only once for each basic patent.

Jonathan Radcliffe of global law firm Mayer Brown commented that the ruling “cuts directly across current patent office and industry practice across Europe, where multiple SPCs are being granted out of the same basic patent despite the prohibition against doing so”.

However, Will James of UK law firm Marks & Clerk pointed to the value of the ruling for pharma companies: “The CJEU rulings have confirmed a relatively broad scope of SPC protection covering all combinations of a particular active ingredient with others, providing that the active ingredient is supported by the underlying patent.”

The decision arose partly from the recent case brought by UK pharma company Medeva, which was refused SPCs for combination vaccines that brought together patented and non-patented active ingredients.

The Medeva case was referred to the CJEU – whose new ruling means that an SPC can be granted for a product with additional active ingredients only if these were specified in the original patent.

Sales increased more than 10% at Sanofi in the third quarter to €8.7 billion, despite the loss of €471 million due to generic competition compared to the same period a year ago.

Total sales grew 10.1% along with an 11% increase in growth platforms after strong performances in its diabetes, vaccines and consumer health divisions.

Christopher A. Viehbacher, Sanofi CEO, says the return to growth in sales and earnings is an “important milestone as the company progressively puts the patent cliff behind it”.

Growth platforms and Genzyme accounted for 68.5% of total sales after the recently acquired business recorded sales up 6.9% to €768 million.

Pharmaceutical net sales were up a tenth to €6.9 billion and helped year-to-date net sales rise 5.5% to €20 billion, despite generic competition to Lovenox, Ambien CR and Taxotere in the US and Plavix (pictured) and Taxotere in the EU plus the impact of US healthcare reform and EU austerity measures.

Its diabetes division was driven by a strong US and Emerging Markets performance which resulted in a 12.4% increase in sales after Lantus recorded growth of 14.6% and 23.4%, in respective markets. Growth in Sanofi’s vaccine division also increased 16.7% after a solid demand for seasonal flu medication in the US.

The Sanofi Group now expects 2011 business net income to be between 2%-5% lower than last year’s total. “We continue to make strong progress in R&D with the submission of five new products and also in the tight control of our costs,” said Mr Viehbacher.

It was reported this week that Sanofi is set to overtake Pfizer as the world’s biggest pharmaceutical company by 2016.

Submissions have been recently filed for Lyxumia (lixisenatide) in the EU, Aubagio (teriflunomide) and Zaltrap (aflibercept) in the US; Visamerin/Mulsevo (semuloparin) in the US and EU; plus Kynamro (mipomersen) in the EU.

The company released its Q3 performance on the day it announced it was cutting jobs in its US R&D and sales divisions.

Par Pharmaceutical has acquired worldwide rights to three products belonging to Teva Pharmaceuticals in connection with the generic pharma company’s buyout of Cephalon.

Under the agreement, Par will own Teva’s fentanyl citrate lozenges, a generic version of Actiq, and the generic version of Amrix (cyclobenzaprine ER capsules). The deal also includes the US market rights to modafinil tablets, the generic version of Provigil.

Annual US sales for Actiq and its equivalent generic products have been reported at $173 million, with $1.1 billion for Provigil, and $125 million for Amrix.

Teva Pharmaceuticals won a race against Valeant to acquire Cephalon, buying the company for $6.8 billion in May 2011.

Pfizer is suing Merck to try to block its new Lipitor-plus-Zetia combination drug.

The new pill will be similar to Merck’s Vytorin, combining the company’s own statin drug Zocor (simvastatin) with cholesterol medication Zetia.

Analysts expect a Lipitor/Zetia version to generate $500 million by 2015.

Pfizer has faced generic competition from various angles on its blockbuster cholesterol therapy. The company recently reached a settlement agreement with a number of pharmaceutical companies to delay the launch of generic versions of Lipitor (atorvastatin) in the UK until May 2012.

It has also allowed Ranbaxy Laboratories to sell its generic version of the drug on November 30^th as well as agreeing to supply an authorised generic to Watson Laboratories on the same day.

However, Pfizer still has some patents on Lipitor that aren’t due to expire for a few years, and is citing one of these in its case against Merck.

The company has stated the patent covering Lipitor's crystalline structure, which is due to expire in 2017, but Merck claims that its Lipitor-plus-Zetia pill won't infringe on the patent.

The lawsuit triggers a 30-month regulatory delay, during which time efficacy questions about Vytorin will be asked. A previous study has found no significant difference in arterial narrowing with Vytorin than with Zocor use alone.

A new study is due in 2013, and if the clinical data works against Vytorin, then a Lipitor/Zetia combo may not be as successful in the market as expected.

Pfizer has agreed a settlement agreement with a host of pharmaceutical companies delaying the launch of generic versions of Lipitor in the UK before its patent expiry.

Teva and other companies have agreed to hold off selling the Israeli company’s generic version of cholesterol drug Lipitor (atorvastatin) until May 2012.

Pfizer submitted an injunction at the end of June 2011, with the company commenting at the time that Teva “chose to undertake an aggressive launch of a generic product on a very large scale in the UK”.

Pfizer subsequently issued a statement saying it was “fully sympathetic to the difficult position that many pharmacies find themselves in having purchased generic atorvastatin from Teva/AAH/Phoenix in good faith”.

At the time, Teva offered support to any pharmacies facing legal action over dispensing its generic version of atorvastatin.

A full trial had been arranged for November at the High Court in London to assess the case, but has now been called off. Pfizer hopes that Lipitor will not be challenged again until its patent expires in May 2011.

A new law has come into force that will give smaller businesses easier access to justice to protect their copyright and trademarks.

The Patents County Court Order No. 2 2011 now clearly defines which copyright and trademark disputes should be heard in the Patents County Court (PCC) and which should be sent to High Court.

A damages cap of £500,000 for all patent claims in the PCC means that small and medium sized companies are less likely to face expensive fees at High Court and will have lower value, less complex cases settled at the PCC.

Baroness Wilcox, Minister for Intellectual Property, said: “These changes provide clarity on the legal processes, certainty over the risks and give small enterprises the confidence to stand on an equal footing with financially stronger companies.”

Current evidence presented to the recent Hargreaves Review of Intellectual Property and Growth indicated that one in five (17%) of small and medium sized firms felt dissuaded from enforcing their IP rights due to potentially high court costs.

Baroness Wilcox commented: “A more accessible justice system will give companies greater incentive to protect and enforce their intellectual property rights. Making it easier for small firms and entrepreneurs to use the legal processes will give them more time to concentrate on business activities, innovate and support economic growth.”

The effectiveness of the damages cap will be monitored with a formal review in 2014.