Pfizer Inc. (PFE) recently received good news with the United States District Court for the District of Delaware upholding the company’s patent for Lyrica. Lyrica is approved for several indications including the management of post-herpetic neuralgia, diabetic peripheral neuropathy and fibromyalgia.
The Court upheld the composition of matter patent and pain and seizure use patents. Based on this favorable decision, Lyrica should be protected from genericization through December 30, 2018 in the US, unless the generic challengers file and win an appeal.
Lyrica accounts for a major part of Pfizer’s revenues with 2011 sales coming in at $3.7 billion. The product continues to perform well and we believe Lyrica has the most potential within Pfizer’s current product suite. It has experienced a very strong ramp since its introduction and we expect the strong growth to continue with label expansions.
Pfizer is currently facing a challenging period with its biggest revenue generator, cholesterol drug Lipitor, facing stiff generic competition. Lipitor, which lost exclusivity in the US in late November 2011, is facing generic competition from several companies including Ranbaxy Labs, Mylan (MYL) and Dr. Reddy’s Laboratories (RDY).
Lipitor, which posted revenues of $7.6 billion in the first nine months of 2011, was hit hard by the loss of exclusivity in the US. Despite making significant efforts to reduce the impact of generic competition, Pfizer saw fourth quarter 2011 Lipitor sales falling 42% to $816 million in the US after facing just a month of generic competition. First quarter 2012 Lipitor sales fell 71% to $383 million in the US.
We currently have a Neutral recommendation on Pfizer, which carries a Zacks #3 Rank (short-term ‘Hold’ rating).
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