On August 17, shares of Horizon Pharma (NASDAQ:$HZNP) increased more than 13%. It all started after the law firm of Green, Griffith & Borg-Breen asserted one of the company’s patents covering Pennsaid 2% against a generic challenge from Teva Pharmaceuticals (TLV:$TEVA). If you’re new to the drug manufacturers industry, Pennsaid 2% is the company’s top-selling drug, having brought in about one-fifth of total revenue in the first half of this year.
This news is significant as it marks a crucial win in Horizon Pharma’s multi-front battle against scores of generic competitors. Seeing as Horizon has settled all the other generic litigation for the drug, the market is hoping this will be the last. As of 3:08 p.m. EDT, HZNP stock settled to a 11.8% gain.
What’s Been Happening?
Pennsaid 2% – a non-steroidal anti-inflammatory drug used to treat osteoarthritis and migraine pain – generated $92.8 million in revenue in the first six months of this year. This represents 18% of total revenue during that timeframe.
Even though the drug plays a defining role in Horizon Pharma’s overall business, Pennsaid 2% revenue dropped 27% year over year. According to the rare disease biopharma, 77% of the decline was caused by lower pricing in 2017.
Similar to most companies, Horizon Pharma has its fair share of competitors. However, except for the challenge from Teva, all of these challengers have been settled.
What Does the Future Look Like?
Most of the generic challenges have been settled in court, which stated that each generic cannot enter the market until the year 2029. If this were to happen with the Teva Pharmaceutical litigation, it would be considered a huge win for Horizon Pharma. If not a win, the company might still be able to stop lowering its drug prices and they could try to maintain their current revenue levels.
Featured Image: twitter
