|Pfizer is going after Teva for lost profits and damages. --Courtesy of Pfizer|
Turns out, Teva Pharmaceutical Industries' ($TEVA) at-risk launch of copycat Protonix was really, really risky. The company now says it's looking at up to $2 billion in legal losses, to compensate Pfizer ($PFE) for lost profits on the drug. That means the $670 million already set aside may not be nearly enough.
Back in 2007, Teva chose to roll out its version of the heartburn drug--marketed by Wyeth at the time--despite the fact that its patent wasn't due to expire till 2011. Teva was betting that a patent challenge would succeed, and its copies would be perfectly legal. But in 2010, a jury decided that the Protonix patent was, in fact, valid--and that Teva had stomped all over it by hawking a generic version.
So, under the Hatch-Waxman Act, Teva is on the hook for twice the damages its launch inflicted on Wyeth's sales. As The Wall Street Journal notes, Protonix sales plummeted 80% in the face of Teva's generic. In 2008, the once-blockbuster generated just $395 million.
Wyeth and Protonix are now owned by Pfizer. And Pfizer is going after Teva for lost profits and damages, seeking about $2.1 billion total, the WSJ reports. A trial is scheduled for early June.
In the past, Teva has pooh-poohed that amount. It set aside that $670 million to cover potential losses in the case, confident in a legal defense based on allegations that the Protonix patent in question simply doubled up on a previously issued patent. But that defense failed in a similar case that Teva was fighting against Eli Lilly ($LLY). So, Teva suddenly isn't so confident that it will win the fight.
Teva can take some small comfort in the fact that it's not alone in the Protonix penalty box. Sun Pharma also launched a version of Protonix at risk, and it's also facing Pfizer's wrath. "We intend to seek full compensation for the damages caused by Teva's and Sun's infringement of the patent," a Pfizer spokesman told the WSJ. Pfizer has claimed about $960 million in damages in the Sun case.
- read the WSJ piece (sub. req.)