News May 2007

Generic Drug Sector To Grow $100 Billion In 5 Years

The generic drug industry looks set to swell in the next few years as patents for many medicines expire, a senior official of Teva Pharmaceutical Industries said on Wednesday.

"In the next five years, pretty close to $100 billion of drugs will be exposed to generic competition," said George Barrett, president and chief executive of Teva North America, in an interview with Reuters after Teva issued first-quarter results.

As the world's largest generic drugmaker, Israeli-based Teva is poised to take a large slice of that pie, although Teva faces competition from firms including Mylan Watson Pharmaceuticals and Barr Laboratories.

"Our pipeline is very strong and includes products with a brand value of about $90 billion," Barrett said.

Teva has 151 drug applications awaiting final Drug Administration approval, and Barrett said it expected 70 to 80 approvals in 2007 and 2008.

Last week, Teva launched a generic version of sleep aid Ambien. It is expected to bring to market soon a generic version of Aciphex. Branded sales of the drug by Japan's Eisai are $1.3 billion a year, and Teva was awarded a 180-day exclusivity.

In another forecast on Wednesday, independent market analysis firm Datamonitor said in a report that the world's top drugmakers face the loss of $140 billion in annual sales by 2016 as patents expire and cheap generic versions of their drugs reach the market.

In the first three months of this year, Teva's sales -- helped by the continued integration of Ivax -- were $2.1 billion, and the company projects sales topping $9 billion this year and $10 billion in 2008.

Most of its sales are of cheaper versions of branded drugs, but a sizable chunk comes from its own drugs such as Copaxone, which is used to treat multiple sclerosis.

Teva makes about half its sales in North America and another quarter in Europe. Barrett said the company was seeking to increase its business in Asia, particularly in Japan where the generic drug market is still in its infancy.

"Japan's generics market is starting to develop, and we see that as an opportunity. We will be a larger participant, and we are pursuing opportunities in Japan," he said, without elaborating.

Teva also is on the lookout for acquisitions, and Barrett said it "has the capacity" to make them. But the company declined to comment on reports it was one of four bidders for the generic drug business of Germany's Merck KGaA.

Source: http://www.reuters.com