Congestion Continues In Private Label Mucinex Pipeline; Court Rules Against Mutual

A ruling for RB n Pennsylvania federal court comes as it girds for increased competition from additional guaifenesin expectorant formulations that are the equivalents of Mucinex brand products and that Perrigo is marketing under license from manufacturer Allergan.

Private label incursion on sales of RB's Mucinex expectorant OTCs remains without a generic 600mg guaifenesin tablet that the firm is contracted to make for Mutual Pharmaceutical Co. Inc. following a federal judge's ruling in Mutual's antitrust complaint.

The April 20 ruling in US District Court for the Eastern Pennsylvania District comes as RB – also known as Reckitt Benckiser Group PLC – girds for increased competition from additional guaifenesin expectorant formulations that are equivalents of Mucinex brand products and that Perrigo Co. PLC will market under license from manufacturer Allergan PLC.

Perrigo already is distributing store brand Mucinex D, guaifenesin 600mg and pseudoephedrine 60mg tablets indicated for relief of chest and sinus congestion, but sales of the Mucinex line, which also includes an allergy product, did not slow in the first quarter, said RB CEO Rakesh Kapoor during the UK firm's April 18 earnings briefing.

"But we expect the remaining lines to come, to have private label and generic competition over the next several quarters," Kapoor said.

Competition will not come, however, from Mutual Pharmaceutical marketing an "authorized generic" of extended-release Mucinex 600mg.

Philadelphia-based Mutual's complaint filed in February 2015 states that it was first to file an abbreviated new drug application for a generic equivalent of Mucinex and that under a 2007 settlement, Adams Respiratory Therapeutics Inc., which developed the Mucinex line before being purchased by RB, agreed to supply Mutual an ER guaifenesin 600mg licensed as an authorized generic of the branded product after another manufacturer introduced a generic (Also see "Mutual Alleges Mucinex Monopoly In Extended-Release Guaifenesin" - Pink Sheet, 4 Mar, 2015.).

Mutual, joined in the complaint by other specialty pharmaceutical businesses under the same ownership, URL Pharma Inc. and United Research Laboratories Inc., also argues that RB assumed all settlement rights and obligations of Adams when it acquired the company. The complaint alleges RB has violated federal laws prohibiting anticompetitive business practices and seeks injunctive relief.

US District Judge Petrese Tucker refused to grant Mutual a preliminary injunction forcing RB to supply the product while the complaint is litigated.

Mutual and its sister companies "have not sustained their burden in proving that they have suffered immediate irreparable harm, that the balance of the harms tips in their favor, and that granting the injunction would serve the public’s interest," according to the ruling.

Mutual Argues For Chance At Foothold

Mutual argued in its motion that it not only lost sales and profits by not marketing a 600mg ERG, but its "ability to compete is completely foreclosed and it is losing the opportunity to gain a firm foothold in the OTC market."

The firm also stated that with "currently so few players in the ERG market, Mutual’s ability to offer a generic version of the 600mg ERG product would instantly create its credibility as supplier of generic” OTC drugs.

However, Mutual failed to show it would suffer irreparable harm in the absence, the judge wrote.

Delaying until September to seek the injunction – seven months after filing the complaint and almost two years after Perrigo's short-lived marketing of its own generic Mucinex ERG – does not preclude a finding for Mutual, Tucker said.

"However, together, the delay and the speculative nature of the irreparable harm weigh against a finding that [Mutual] would be immediately harmed," she wrote.

While Mutual argues it would have little chance of competing in the generic guaifenesin market should RB be ordered following a trial to provide the product, Tucker said the firm did not show its chances would be harmed. Mutual has acknowledged that only Perrigo currently is distributing Mucinex generics and that Allergan is not likely to also market the products.

Noting rulings in similar cases, she said Mutual "failed to sustain its burden of a ‘clear showing of immediate irreparable injury,’ or a ‘presently existing actual threat.’”

The judge explained "there is some doubt" that Mutual will" ultimately succeed" in the litigation, but she considered its motion for an injunction because it "demonstrated a reasonable probability" to prevail.

Tucker also denied RB's motion to dismiss the antitrust claims, state law claims and claim for declaratory judgment pertaining to Perrigo’s 600mg ERG formulation of Mucinex, but approved its motion to dismiss Mutual's claim for declaratory judgment relating to all other third-party formulations of Mucinex.

Requested Injunction 'Jeopardizes' RB's Reputation

Additionally, Tucker said RB "has not affirmatively breached the agreement" and there is a possibility the firms can "continue to engage in talks to resolve the open items."

The judge observed that RB has not provided the product largely due to Mutual's failure to provide details on its color and shape and to allow RB enough time to formulate and manufacture a sufficient supply for launch that would be of the same quality as Mucinex ERG.

The firms have not agreed on the volume of the initial supply, with Mutual projecting 28m tablets in the first year was reasonable, nor on the characteristics of the tablets. RB argued in its response to the motion for injunction that Mutual executives "confirmed under oath that despite RB’s repeated request for a commitment for the volume" as required under the 2007 agreement, "they discussed various options with RB but went no further.”

Additionally, while Mutual asserted that it "was clear from the beginning, it preferred the oval tablets described in Reckitts’s NDA, but would accept whatever would get Mutual in the market ASAP,” RB "maintains that shape is still an open item," according to the ruling.

Tucker emphasized she agreed with RB that complying with Mutual's request to receive a launch supply of 600mg ERG within 30 days of a court order "jeopardizes its reputation as a reputable provider of over-the-counter drugs."

RB would need 18 weeks to modify its Mucinex tablets in color, logo embossing and shape. The process includes trials and evaluations to test whether the blend "as slightly altered still performs properly" and agreeing with Mutual on product specifications and a quality agreement for shared responsibility to package the drug.

"There are issues involved with FDA compliance, including FDA bulk validation production, and whether Mutual has an approved and fully validated packaging and labeling plant as required by FDA’s" current good manufacturing practices, Tucker wrote. "There are studies to be made for reports that RB must keep on hand in the event that the FDA performs a site inspection."

She ruled that "the harm [RB] would incur if required to comply with the entry of the preliminary injunction exceeds the harm [Mutual] would incur absent the entry of the injunction."

RB "could suffer irreparable damage to its reputation and financial security if it is required to swiftly produce these tablets and suffer the prospect of an ineffective drug, FDA investigation, and litigation from consumers," according to the ruling.

Tucker also noted that Mutual argued incorrectly that the 2007 agreement requires RB to produce the tablets in 30 days. Instead, the agreement states that Mutual can begin purchasing and RB can begin supplying the tablets no sooner than 90 days after" a third party launched a generic 600mg ERG.

Acquisitions Drive RB Health Care Growth

Society Generale Cross Asset Research

In addition to Mucinex, RB's health care brands available in the US include Durex condoms, Gaviscon heartburn products, MegaRed supplements and Strepsils sore throat and allergy lozenges.

The firm reported its health care products' first-quarter sales grew 10%, despite headwinds including retailers destocking in Russia and the US after a slow start to the flu season. While the growth is slower than the 14% rate in the year-ago quarter, it exceeds the consensus expectations of 7.4%.

Its largest division in the group at 42% of total sales, the hygiene business, increased 3% in the January-March period; the household care products division, including Lysol brand, also reported 3% sales growth.

Overall, revenues increased 5% to £2.3bn ($3.3bn) for the quarter; analysts on average expected an 4.9% increase. RB forecasts a 5% tailwind this year from foreign currency exchange rates.

Mucinex A Tricky Generic Wicket

Dublin-based Perrigo in January began shipping the first private label extended-release guaifenesin and pseudoephedrine tablets and said it plans in 2016 to launch four other Mucinex private label equivalents under license from Allergan (Also see "Perrigo Ships Guaifenesin/PSE Tablets, But Single-Ingredient Snags Linger" - Pink Sheet, 5 Jan, 2016.).

Without Allergan's help Perrigo would not be shipping Mucinex D and planning other guaifenesin-containing product launches. Perrigo received FDA approval for a guaifenesin 600mg ANDA in 2011, but since then the firm has twice stopped distributing the product.

After it halted a limited launch in 2012 because raw material sourcing did not meet manufacturing specifications, production of the formula stalled for more than two years until it resolved its supply problems. It began distributing the product broadly in October 2014, but in January it again stopped due to problems with an excipient used in the product.

Allergan is making Mucinex equivalents since receiving FDA approval in May 2015 for abbreviated NDAs for three formulas – guaifenesin 1,200mg and guaifenesin/dextromethorphan in 600mg/30mg and 1,200mg/60mg combinations.