Lawsuits against the FDA don't normally get much traction. Luckily for Hospira ($HSP), it has one that did. A federal judge has suspended the agency's decision allowing drugmakers to market certain generic copies of Hospira's top product--but it won't recall the copies that are already out there.
As of a Tuesday restraining order, marketing copies of Hospira's sedative Precedex is a no-no, at least for now, The Wall Street Journal reports. The judge initially ordered the FDA to recall knockoffs that had already been sold and distributed, but later granted a request from Mylan ($MYL) to turn that order around. Mylan had started shipping generics Monday.
Hospira challenged the U.S. regulator over patent protection earlier this week, claiming the FDA's decision to allow generics would violate its patent. Currently, Hospira has one remaining active IP shield, which covers the use of Precedex for sedation in an intensive-care setting through 2019.
The judge's temporary order expires Sept. 2. If Hospira ends up prevailing, the win will be a big one for the Illinois drugmaker, with Precedex generating about 11% of Hospira's $4 billion in annual sales. It will also be a win for the U.S. branded sales team the company said it would have to chop if generics launched.
And while a few Mylan copies may be out there, they'll do a lot less damage than a full-on generics onslaught could have. According to Sterne Agee analyst Shibani Malhotra, 5 versions were circling Hospira's product, launches of which could have taken a 20% toll on the company's share price.
But regardless of the litigation, generics will arrive--and soon. In last year's annual report, Hospira said it had settled a patent fight with Novartis' ($NVS) Sandoz, allowing it to launch its Precedex copy by December.
Special Report: Top 10 generics makers by 2012 revenue - Hospira - Mylan