Mylan cuts short J&J's Concerta generics reprieve with new FDA nod

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Last week, Johnson & Johnson caught a break when the FDA kicked a pair of controversial copies of its ADHD med Concerta off the market. Now, there’s a new challenger stepping up to the plate, though--and that’s Mylan.

Tuesday, the generics behemoth won FDA approval for its knockoff for all Concerta strengths. And unlike the two versions the FDA just booted, from Mallinckrodt and Lannett’s Kremers Urban, “it seems like Mylan did get an AB rating,” Evercore ISI analyst Umer Raffat wrote in a note to clients--meaning it’s substitutable for the original.

It’s the first Concerta copy to grab that distinction, too. The Mallinckrodt and Kremers Urban products couldn’t make the same claim, and when the FDA found, post-approval, that they wore off more quickly than J&J’s branded med did, the agency gave the companies 6 months to prove equivalence.

That deadline passed mid-last year, and regulators finally gave the generics the boot last week--timing that Barclays analysts Douglas Tsao and Morgan Williams think is no coincidence. “We suspect the FDA wanted to ensure supply of the product before moving to remove the BX-rated products,” they wrote to investors Tuesday.

And now, the playing field has opened up for Mylan, the newcomer. That’s not to say it’s without its competition, though. Actavis, now part of Teva, boasts an authorized generic of the product, for which J&J reaps 50% of the royalties. As of last May, it was commanding 70% of the generic market.

But even with the brand under assault from its authorized generic--and Mallinckrodt and Lannett's non-substitutable versions--the New Jersey pharma giant still expects to book $450 million in Concerta sales this year.

And that means there's plenty of room for Mylan to make a dent. “We don’t expect Mylan to take market share leadership," Tsao and Williams wrote, but they think the company “could easily exceed Mallinckrodt’s $200M in sales since Mylan, unlike Mallinckrodt, will be selling all of the marketed strengths of generic Concerta.”

It’s a pretty good time for Mylan to get a boost, too, considering it’s been under siege for weeks over its lofty price hikes on key product EpiPen. The company has already agreed to roll out a half-priced generic of the star drug and fork over $465 million to the U.S. Department of Justice to resolve allegations that it overcharged Medicaid for the product, and “this approval provides some cushion,” the Barclays analysts wrote.

Meanwhile, Mallinckrodt last week turned to litigation against the FDA in an effort to keep its knockoff on the market. “We don’t expect Mallinckrodt to succeed in these efforts, especially in light of” Mylan’s regulatory win, they wrote.

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