Lab companies crowd generic drug market

0 Comments | Oakland Tribune, Mar 24, 2004 | by Nicholas Yulico, BUSINESS WRITER

HAYWARD -- Impax Laboratories launched its generic version of a major antidepression drug Monday, but the bad news for the company is that competitor Eon Labs is now launching its version six months earlier than expected.

The market for the generic version of GlaxoSmithKline's Wellbutrin SR 150mg is now being viewed as "crowded" by analysts at Banc of America Securities.

On Monday, Andrx Corp. relinquished its 180-day exclusivity rights to distribute the generic version of the drug, which cleared the way for immediate FDA approvals for the versions created by Hayward- based Impax, Eon Labs and Watson Pharmaceutical Industries, which are all immediately launching their products.

If Andrx had not dropped its rights, Eon Labs would have had to wait six months after a period in which only Impax's and Watson's drugs would be on the market.

Teva is marketing the drug for Impax, which has a profit-sharing agreement with Andrx. Sales of Wellbutrin SR by GlaxoSmithKline have generated about $1.2 billion annually.

Banc of America said Eon Labs is the "big winner" of the move, while the news is "good" but "mixed" for Watson, Impax and Andrx.

"The good news is that each of these companies will begin to realize generic Wellbutrin SR related revenues; however, the market will be more crowded with Eon's earlier than expected entry," Banc of America said.

Impax and Teva are now expected to see $131 million in sales of the drug -- $11 million less than if Andrx had kept its exclusivity rights intact, according to a report by Adam Greene, principal of First Albany Capital.

However, the potential lower gains will be offset by lower profit sharing with Andrx, Greene said, resulting in virtually no impact on Impax's bottom line.

Shares of Impax dropped 77 cents or 3.57 percent to close at $20.81 Tuesday.>

Nicholas Yulico can be reached at (510) 293-2465 and nyulico@angnewspapers.com .