Eli Lilly (NYSE: LLY) has been hit with yet another key loss on the generic drug front, losing its case in federal court to protect its patent for the ADHD drug Strattera. And this one could prove financially painful in a matter of months.
Lilly signaled that Teva and Novartis could quickly roll out new generic competitors, slicing into its near-term revenue stream. The drug, known generically as atomoxetine, earned just over $445 million last year. And the prospect of seeing low-cost competition undercut the drug forced Lilly to reduce its revenue growth estimates for the year from the low to mid-single digits to just the low range.
This was Lilly's second setback in court in the past month, with an appeals court clearing the way to new competition for Gemzar two years earlier than the pharma giant had planned. Investors weren't at all happy to see Lilly beating a fresh retreat in court. Its shares slid 3 percent on the news as Lilly conceded that it faces more patent struggles ahead.
"Assuming a launch of a generic version of Strattera in the United States, the loss of revenue will undoubtedly add to the challenges we will face during upcoming patent expirations on other key products," says Lilly CEO John Lechleiter (photo). Lilly says it plans to appeal.