The Zacks Analyst Blog Highlights: Novartis, AstraZeneca, Roche Holding,
Pfizer and Gilead Sciences
CHICAGO, April 8, 2013
CHICAGO, April 8, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Novartis AG (NYSE:NVS),
AstraZeneca PLC (NYSE:AZN), Roche Holding AG (OTC:RHHBY), Pfizer Inc.
(NYSE:PFE) and Gilead Sciences Inc. (Nasdaq:GILD).
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from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Friday's Analyst Blog:
Generics: The Way Forward in India?
Earlier this week, the Indian Supreme Court ruled against Novartis AG
(NYSE:NVS) in a patents case involving its cancer drug Glivec. The impact of
the judgment is seen as far reaching for it and could determine the future of
patent protection in India.
Novartis first received a patent for Glivec in 1993, a version which was later
discarded during development. Later it discovered a new "beta crystal" form of
the drug which it claims is more effective than the earlier formula. In 2006,
it applied for a patent of this version in India. This move was taken despite
the fact that Indian patent law does not recognize such minor modifications.
This practice known as "evergreening" by patient groups and "life cycle
management" by the pharmaceutical industry is fairly common in the U.S. In
fact the U.S. FDA approved 1,035 new drug applications from 1989 to 2000. Only
15% were treated as a "highly innovative drug."
The pharma industry believes that the problem may be essentially India
centric. For instance, the new kind of Glivec has been granted patents in
around 40 countries, which includes U.S., Russia and China.
The U.S. industry trade group Pharmaceutical Research and Manufacturers of
America has said that the Supreme Court ruling indicates that the atmosphere
for innovation in India is poor. An industry analyst was quoted as saying that
the future of branded drugs in India is uncertain.
But the Indian market's potential is difficult to ignore. Even though it is at
number 14 globally in terms of size, it is growing at an annual rate of 13 to
14%. Additionally, India is the second largest country in terms of population.
At a time when mature economies are sluggish at best, it is a market which
offers great promise for the pharma sector.
Meanwhile, India has become a major producer of cheap generic drugs. Not only
does it cater to a country where drug sales amount to $13 billion a year, it
has also emerged as a major supplier to emerging markets. But the Indian
judicial system and patent legislations continue to make things tough for
The latest addition to such measures is compulsory licensing. Last month, the
controller general of patents authorized an Indian pharma company to produce
and sell a patented cancer drug from Bayer AG. A low priced version of the
drug called Nexavar will be produced by Natco Pharma Ltd.
In Nov 2006, Natco and GM Pharma Ltd successfully contested a patent held by
AstraZeneca PLC (NYSE:AZN) on its lung cancer drug Iressa. This ruling was
upheld in Nov 2012 by India's Intellectual Property Appellate Board.
Additionally, Roche Holding AG (OTC:RHHBY) lost patent protection on hepatitis
C drug Pegasys during the same month. And Pfizer Inc.'s (NYSE:PFE) patent on
cancer drug Sutent was revoked last year. Sutent was being sold by the company
in India since 2007. Following these developments, Pfizer urged the U.S.
government to take additional measures to protect patents in India.
The status of patents in India has meant that the likes of Novartis are
diverting investments to other markets such as China. However, even China is
now taking steps to change its laws to enable domestic manufacturers to
produce cheaper versions of patented drugs. Meanwhile, the pharma sector will
need to address further challenges to patent protection in other nations like
Argentina, the Philippines, Brazil and Thailand.
Gilead Sciences Inc. (Nasdaq:GILD) has already adapted to the situation. It
has granted Indian generics manufacturers licenses to produce its cutting edge
drugs. They will now be made available to the Indian market at far lower
prices. Whether others follow suit or reduce research and development
activities in India will determine the future of pharma majors in that
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