2930.08 @ 4 PM: FiercePharma is now also following this story, of mine. Very cool; with one bit of white-out to FiercePharma's, here: the generic-makers could -- emphasis could -- be in the market in the second-half of this year, 2008, not next year, 2009, IF Latham & Watkins' position wins the day, for Orchid Pharma -- see below. . . .
4.29.08: That gracious fellow, Sir Pharmalot, has once again hat-tipped this blog, for the below story. . . . Cool!]
As we all likely know by now, that Claritin combo-pill won't ever see the after-glow of commercial sales in the US, on drugstore shelves, at least. And the reason the markets shrugged today, in response, is because it is likely that the loss of that potential incremental future revenue (from such an imaginary combo-drug) is probably just about offset by the avoidance of incremental running-costs of marketing that would-be combo pill, at Schering-Plough. . . .
I strongly suspect this will not be the case for Clarinex, an almost $800 million per year (in sales -- not profits) juggernaut for Schering, at least until now.
There is a deeper, apparently-entirely new story here -- one I entirely missed, at first. I literally blew past this court filing, last week, thinking there were already generic versions of desloratadine (sold by Schering, prescription only, as Clarinex®) inside the US market.
What I missed was just how very near to the market, the amassed-hoard of generic descloratadine purveyors/competition may sit, tonight -- and how much there is to gain -- and lose -- in this battle, now. Last year, according to the Form 10-K, sales of Clarinex increased about 11 percent to $799 million in 2007, over 2006. For the first quarter of 2008, sales of Clarinex grew another 4 percent (in the allergy off-season), adding another $213 million to Schering's top-line. That is not insignificant, given the expected Vytorin/Zetia fall-offs, for all of 2008.
While the chemical compound commonly known as desloratadine (imaged, at right, which is sold by Schering as Clarinex®) doesn't come off of a Schering patent until about 2020, an important new development has appeared, in court documents just filed April 16, 2008, in Schering's own suit to keep several would-be generic makers from selling desloratadine, as the chemical equivalent of Clarinex RediTabs.
In the In Re Descloratadine Patent Litigation (MDL No. 1851, Case No. 3:07-CV-3930 US Dist. Ct. NJ), Orchid Chemicals, an Indian company, and one of the would-be generic competitors, filed an Amended Answer to Schering's Original Complaint on April 16, 2008. Orchid's new answer sets out a very-interesting factual counterclaim to Schering's assertion that so-called FDA "Orange Book" status applies to Clarinex RediTabs. Now, generally speaking, if the branded manufacturer (here, Schering) files suit for patent-infringement within 45 days of learning of a generic's plans (here, Orchid, and others), on a patented-drug it has listed in FDA's so-called Orange Book, the court generally must automatically grant the branded drug (Clarinex) at least 30 months of continued exclusivity (or to at least March 2009, here), during the pendency of the dispute. That's the general rule (albeit an immensely over-simplified version of it). And, that, is just what Schering did. "So, what's the boggle, here, friend?" Well. . . .
What Orchid now says (actually, swears, by the way), is that the chemical compound out of which Clarinex RediTabs are made, was never covered by Schering's so-called '274 patent -- the one at issue here -- and the one Schering did file in FDA's Orange Book. The '274 patent, Orchid swears, covered compounds made of salts -- and the much-beloved, quick-dissolving Clarinex RediTab, is not made from any salt, at all, apparently (See above, right -- Yeah I took high school chemistry too. Pass-fail. J/K -- Heh!).
Quoting from the Orchid Answer, now:
. . . .18. Defendant Orchid filed an ANDA for desloratadine orally disintegrating tablets (No. 78-356), which referenced Plaintiff Schering’s CLARINEX® RediTabs NDA, and included a paragraph IV certification for the ’274 patent listed in the Orange Book. Orchid provided notice to Schering of the certification, Schering sued within the required 45-days, and now FDA presumptively is prevented from approving Orchid’s ANDA for 30-months, or until about March 2009, absent prior action by this Court.
19. Schering improperly caused the FDA to list the ’274 patent with regard to NDA No. 021-312 because the ’274 patent does not cover Clarinex® RediTabs. The ’274 patent discloses and claims desloratadine compositions containing a basic salt. However, as the FDA-approved label for Clarinex® RediTabs confirms, Schering’s orally disintegrating formulation does not contain a basic salt. June 26, 2002 Final Draft Labeling at 1.
20. Orchid is in a position to enter the market for generic desloratadine orally disintegrating tablets but for the presumptive 30-month stay associated with Schering’s filing of the instant lawsuit relating to Orchid ANDA No. 78-356. Thus, as Schering is aware, Orchid has fully and finally resolved a separate lawsuit with another pharmaceutical company involving another patent listed in the Orange Book for NDA No. 21-312 and another listed patent has expired. Orchid expects to obtain tentative approval to market its generic desloratadine orally disintegrating tablets in the near future. In short, the 30-month stay is the only remaining barrier to the availability of generic desloratadine orally disintegrating tablets to the public.
21. Concerned that pharmaceutical companies might improperly list patents in the Orange Book to thwart potential generic entry, Congress has specifically authorized courts to issue an order that the NDA holder “correct or delete the patent information submitted by the holder . . . on the ground that the patent does not claim either — (aa) the drug for which the application was approved; or (bb) the approved method of using the drug.” 21 U.S.C. § 355(j)(5)(C)(ii).
22. Orchid is entitled to an order that Schering be ordered to delete the ’274 patent from the Orange Book with respect to NDA No. 21-312 on the grounds that the ’274 patent neither claims the drug for which NDA No. 21-312 was approved nor an approved method of using the drug. . . .
Thus, if there is no Orange Book-listed protection for the '274 patent to reach the RediTab formulation of Clarinex®, then Orchid (and, presumably, all of its co-defendants) may begin marketing the generic "at risk", almost immediately. Orchid, for its part, indicated (see Answer excerpt, above) it is ready to begin, but for these court proceedings.
This court filing was made on April 16, 2008 -- a full seven days before the Schering-Plough Q1 Earnings Conference Call. Interesting.
We shall see whether this development appears in the Form 10-Q, due in very short order [but how much more quickly do you think Clarinex sales will slow, if, correlatively -- Claritin costs $25 a box, and the generics cost about $12.50 a box -- how much will a generic form of desloratadine sell for? Half-off? Wow.]
That 10 percent revenue growth, on over $800 million in Schering sales, from Clarinex, in 2008 looks to be in fairly serious peril, from where I sit. The central question, then, is whether Orchid (and the others) will be willing to go forward with "at risk" generic launches (and risk owing additional damages, if all the counter-claims are found without merit). If a good portion of $800 million is to be gained, though, I think it likely at least some of them will launch.
Now, it is possible that Orchid is mistaken, in these assertions in its filing, but Orchid is represented by Latham & Watkins LLP -- a very large, careful, well-respected firm (out of the Newark, New Jersey office of Latham, actually) -- and so, it is extremely unlikely that this is all some big mistake, on Orchid's part. No, it looks to me, to be yet a[nother] likely mis-cue, by Schering.
If Schering does not, in fact, have an FDA Orange Book-filed patent number that covers non-salt formulations of Clarinex, the generic tidal wave may be forming, and rising, even as I type this note. . . . and, if that's so, you ought to buckle-up for quite a ride in the back half of 2008.