There's a pretty solid Reuters story out this morning, on the additional restructurings and headcount reductions still needed in pharma -- as the so-called "patent cliff" revenue fall-off has accelrated beyond what Wall Street had projected to this point.
It is easy to guess that Wall Street didn't fully expect that health care reform would pass in the first half of Mr. Obama's first term. Thus the Street didn't bake-in a steep-enough falloff, assuming that the old world would persist throught 2014.
Not so, thus -- according to Esha Dey, writing for Reuters:
. . . .A rolling wave of restructuring reflects the lack of major new drug launches to offset looming generic competition to multibillion-dollar medicines like Sanofi-Aventis and Bristol-Myers Squibb's drug Plavix for blood clots and Merck's Singulair for asthma.
While concerns over the "patent cliff" have dogged the industry for several years, in some cases the entry of generic versions of brand-name drugs has picked up more quickly than Wall Street had anticipated.
The entry of generics can cause branded drugs to quickly lose at least 80 percent of U.S. sales, but can be 90 percent or more once multiple generics are available. . . .
Indeed. Here's a mid-2009 backgrounder, on the Singular® (Montelukast) patent litigation status -- with Teva. Since then, a "pay for delay" deal has been struck (as this January 2010 agreed dismissal of appeal hints) -- which likely has the patent exclusivity ending not much before August of 2012. That would be when the drug comes off patent, anyway. We'll keep you posted, if a shorter date emerges on this $5 billion a year Merck franchise.
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