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UPDATE 2-Novartis hits Astellas with transplant drug generic

Published 08/11/2009, 04:33 AM
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* Novartis launches first generic version of Prograf

* Astellas to challenge FDA over Prograf in court

* Astellas shares down 5 pct vs 0.4 pct fall for sector

* Analysts see mild falls in Prograf sales

TOKYO, Aug 11 (Reuters) - Swiss drugmaker Novartis AG said on Tuesday it has launched a generic version of Astellas Pharma Inc's transplant drug Prograf, its biggest drug by revenue, helping send shares of the Japanese drugmaker 5 percent lower.

Astellas said on Tuesday it would challenge the U.S. Food and Drug Administration in court, after the regulator knocked back its request for higher hurdles for generic rivals to Prograf.

"The stock market probably took the news of the FDA rejection as a sign of an imminent approval by the FDA of a generic version of the Prograf," Credit Suisse analyst Fumiyoshi Sakai said, pointing to the stock's drop immediately after Astellas' announcement.

The stock had fallen to its low for the day by the time Novartis unveiled the launch plan.

Prograf, which helps prevent organ rejection, garnered some $2.1 billion in revenue for the Japanese drugmaker in the last financial year, or 21 percent of its total sales.

Astellas lost U.S. patent protection for Prograf in April 2008 but until now has not faced any generic competition. The generic version was launched by Novartis' Sandoz division.

The blow comes amid development setbacks for Japan's second-largest drugmaker which also faces the expiry of the U.S. patent for its Flomax urinary drug in October. Flomax accounts for around 12 percent of Astellas' sales.

Despite the stock's dive on the threat of a generic rival to Prograf, analysts generally doubt competition will reduce Prograf's revenues by much in the near term.

"The debut of a generic rival in the first half of the business year (to March) is as expected. The stock over-reacted to the news, probably because it had risen too high recently," said Yo Mizuno, an analyst at Daiwa Institute of Research.

Citing the likelihood of existing Prograf users avoiding unfamiliar generic products, he projected that the sales of Prograf in the United States would drop only gradually over the long term, and by 5 percent in dollar terms this fiscal year and 6 percent next year.

On the other hand, Mizuno said competition will hamper Flomax severely, with the urination drug's U.S. sales tanking to one-tenth their level seen this year in the year to March 2011.

Ranbaxy Laboratories, an Indian generic drug maker controlled by Daiichi Sankyo, aims to launch a generic version of Flomax in March.

Astellas said in a statement that the FDA had "substantially denied" its request that generic versions of Prograf require clinical trials to compare their absorption versus the brand drug.

It also said it will request labelling changes that require doctors to be notified if a pharmacist is considering substituting a generic drug for Prograf.

Astellas' request took the form of a citizen petition. The FDA receives some 200 such petitions a year. The complaint will be filed in the U.S. District Court in Washington, D.C.

It shares dropped to 3,690 yen, underperforming the Tokyo pharmaceutical sector which fell 0.4 percent. (Reporting by Yumiko Nishitani; additional reporting by Emma Thomasson in Zurich; Editing by Edwina Gibbs and Joseph Radford)

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