Allergan is taking a tried-and-true route to fighting off competition for a key drug. It has asked the FDA to set a higher bar for approving generic versions. Like Sanofi ($SNY) and Teva ($TEVA) before it, Allergan ($AGN) argues that knockoff versions--in this case, versions of its eye drug Restasis--should be tested in humans before approval, not just in a lab.
In June, Allergan was blindsided by FDA draft guidance that would allow Restasis copycats onto the market without testing--and, as such, years earlier than anyone expected. Analysts and investors went into a tizzy, and shares plummeted. While Restasis comes in a distant second to Allergan's top-selling Botox, it still brought in $792 million last year. Obviously, Allergan wants to hang onto that revenue stream as long as possible.
In a letter posted on the company's website, Allergan contends that Restasis copies can't be fully vetted in the lab, because current lab tests can't properly assess the drug's distribution or delivery--or that of any eye drug, for that matter. The "ocular environment" is "unique and challenging," the company says, and Restasis is, by consequence, too complex for that sort of review. So, generic versions can't be deemed bioequivalent unless they're tested in patients, the company says. The FDA's proposal to do so is contrary to the agency's past position.
While different in particulars, the argument is similar to Sanofi's in defense of Lovenox, the blood thinner that delivered $4 billion in 2009 sales, the year before its tumble from the patent cliff. Sanofi sued the FDA, claiming that the drug was too complex to be copied without extensive clinical trials--and approving generics would violate the agency's own rules. The lawsuit failed, and the first generic version stole market share more quickly even than its makers expected. Teva also petitioned FDA to require clinical trials for generic versions of Copaxone--twice. The FDA has rejected Teva's argument both times, saying it's premature; Copaxone now goes off patent next year.
It's been a tough few months for Allergan. In April, the FDA refused to approve its new migraine drug because of manufacturing problems. The Restasis storm hit in June. The stock fell enough to ignite rumors about a possible takeover. And earlier this month, Allergan lost two patents in India.
- see the letter from Allergan (PDF)
Special Report: David Pyott - 20 Highest-Paid Biopharma CEOs