FDA approves Teva's generic of Roche blockbuster Xeloda

Roche's ($RHHBY) blockbuster Xeloda goes off patent in December, so it was inevitable that a generic would hit the market at some point. It just wasn't known when. Well, that when is now. The FDA Monday said it had approved a generic from Teva Pharmaceutical Industries ($TEVA).

Teva has been approved to market generic capecitabine in 150 and 500 milligram strengths, the agency said. "Generic drugs are important options that allow greater access to healthcare for all Americans," said Dr. Kathleen Uhl, acting director of the Office of Generic Drugs in the FDA's Center for Drug Evaluation and Research. "This medication is widely used by people living with cancer, so it is important to have access to affordable treatment options."

Xeloda has been around for more than a dozen years but continues to be a solid performer for Roche. It turned in about $1.6 billion in revenues last year as sales continued to grow. Roche in 2011 settled a patent fight with Mylan ($MYL) over a generic of the drug, but the terms were undisclosed, so it's not publicly known when Mylan will launch its version. It also had litigation with Teva over the drug.

Roche is positioned to absorb the shock. Its Genentech division and partner ImmunoGen ($IMGN) picked up FDA approval for the late-stage breast cancer therapy Kadcyla in February. It is expected to help fill the void left as generics eat away at Xeloda. Kadcyla will cost $9,800 a month, or about $94,000 for a 9.5-month course of therapy. Projections of peak sales for the drug have ranged from $2 billion to $5 billion a year.

- here's the FDA announcement

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