Mucinex Patent Ruling Breathes Life Into Watson And Perrigo ANDAs

Watson Pharmaceuticals' success against Reckitt Benckiser's Mucinex patent infringement suit could clear a path for Mucinex equivalents to launch in the first half of 2011.

In addition to Watson, the Feb. 9 decision by the U.S. District Court for the Southern District of Florida eliminates an obstacle for other private labelers, including Perrigo, to introduce their own generic extended-release guaifenesin products following FDA approval.

Watson filed its abbreviated new drug application for guaifenesin after Perrigo, but Perrigo lost a 2010 appeals court decision regarding Reckitt's '252 patent for Mucinex (Also see "Reckitt Mucinex Patent Gets Reprieve As Appeals Court Rules Against Perrigo" - Pink Sheet, 9 Aug, 2010.).

Watson now can launch generic Mucinex products "at-risk" once FDA approves its ANDA, analysts say.

In contrast, the Florida court ruled Watson's ANDAs for Mucinex, Mucinex D and Mucinex DM do not infringe the '252 patent. The ruling in Reckitt Benckiser v. Watson Laboratories contains proprietary information and was not made public.

Reckitt is "disappointed" by the decision, a spokeswoman said in an e-mail, and "will consider our options," which include an appeal to the Federal Circuit Court of Appeals in Washington.

At least one other patent on Mucinex, the '032 patent, remains in force until April 28, 2020, according to FDA's Orange Book. However, pending FDA approval, Watson could launch Mucinex equivalents at-risk, Credit Suisse analysts said in a Feb. 10 research note.

A Watson spokeswoman declined to forecast when FDA might approve the firm's ANDA.

Credit Suisse said it "could come soon," given that Watson filed the application 24 months ago and approvals typically take 27 months.

ANDAs In Line

United Research Labs and subsidiary Mutual Pharmaceuticals filed the first ANDA for generic Mucinex. Under a settlement with Adams Respiratory Therapeutics, which Reckitt acquired in 2008, URL/Mutual is prohibited from launching until July 2012, unless competitors reach market first (Also see "Watson Files ANDA For Mucinex DM, Gets In Line For Generic Guaifenesin" - Pink Sheet, 27 Apr, 2009.).

Next in line with a Mucinex ANDA is Perrigo, which faces a new trial on the '252 patent in November in the U.S. District Court for the Western District of Michigan.

Perrigo omitted generic Mucinex from its financial guidance for fiscal 2011, which ends in June (Also see "Perrigo's Generic Mucinex Becomes A Long Shot To Launch In Fiscal 2011" - Pink Sheet, 16 Aug, 2010.).

UBS analysts said in a Feb. 9 note, "Watson's success could add more pressure on Reckitt to settle with Perrigo," and the private label giant could earn an additional 15 cents of earnings per share annually from sales of Mucinex equivalents.

Collins Stewart analysts suggested the Mucinex patents "are not that strong," giving Perrigo further ammunition to move forward with equivalents.

Annual sales of branded Mucinex and Mucinex DM (guaifenesin/dextromethorphan) are estimated in the neighborhood of $190 million each, and for Mucinex D about $95 million (guaifenesin/pseudoephedrine).

Reckitt is "disappointed" by the court ruling against its Mucinex patent and will consider appealing to the Federal Circuit Court of Appeals.

While Watson is third in line with its Mucinex ANDA, it was first to file for Mucinex D and DM and could be granted 180 days of generic market exclusivity for the two products. Credit Suisse estimates Watson could add 11 cents of EPS in 2011 if it gains that exclusivity.

Reckitt Ready For Generic Reality

Reckitt has girded itself for the loss of Mucinex exclusivity to come as early as 2011; CEO Bart Becht said previously, "We fully discounted this when we bought" Adams (Also see "Reckitt Sees End Of Mucinex Exclusivity Despite Delay Attempts" - Pink Sheet, 3 Aug, 2009.).

However, Becht said during the U.K. firm's 2010 
year-end earnings call Feb. 9 – before the patent infringement ruling became public – that he does not foresee a dramatic sales drop-off when Mucinex equivalents arrive on shelves.

"This is clearly not an 80% drop-off scenario," the CEO said. "We are talking about a brand, which has been on the market for 10 years plus, which means great consumer loyalty."

Still, UBS projects Mucinex generics, with a 45% price discount, could seize a 60% market share from Reckitt's decongestant brand.

By Dan Schiff