In this quarterly report, we look at a few of the companies beginning to make their marks on the US generics market either with their fi nished dose products or active ingredients, and analyze trends and statistics relating to the market as a whole.

1. Image CopyrIght: iSTOCKpHOTO
MOVERS AND SHAKERS
A PHARMA MATTERS REPORT.
April-June 2010
The Thomson Reuters quarterly report on the US generics
industry using strategic intelligence and competitive analysis
information from Newport Premium™, the critical product
targeting and global business development system from
the industry authority on the global generics market.

2. In this quarterly report, we look at a few of the companies
beginning to make their marks on the US generics market either
with their finished dose products or active ingredients, and
analyze trends and statistics relating to the market as a whole.
For more information on Thomson Reuters
API Intelligence solutions, including Newport Premium,
visit go.thomsonreuters.com/newport
PHARMA MATTERS | MOVERS AND SHAKERS

3. SeCTiOn i: inTrODuCTiOn WHAT iS
An AnDA?
The European Generic Association had its annual meeting in Rome
in June 2010. Attendees concluded that conditions look positive An Abbreviated New
Drug Application
for the US generic market while the European generic industry
(ANDA) is the first
continues to struggle with delays to generic launches, disincentives step for a generic
for generic prescribing in a number of countries, increasing pricing drug in the US. It
pressures, and government-mandated price cuts. is submitted to the
FDA to prove that
Why does the situation look better in the US? First, a large the generic version
number of products will lose patent protection over the next few is bioequivalent to
years. Second, the pricing environment in the US has stabilized. the innovator drug
Richard Silver from Barclays Capital explained that the relative in question. On
approval, the generic
pricing stability is the result of industry consolidation over the version is added
past 10 years and explained that the remaining competitors to the Approved
are more rational in their pricing strategies. Third, generic Drug Products List
penetration is occurring at ever-increasing rates. For example, (“Orange Book”) and
US generic substitution today occurs at 80 percent conversion the company may
manufacture and
over four to six weeks as compared to 60 percent within six to market it. An ANDA
eight months just a few years ago. Drivers accounting for the may be submitted
rapid substitution rate include drug retailers’ increased focus on before the patent on
aggressive generic substitution with higher profitability, the rise the innovator drug
of authorized generics, and therapeutic substitution. expires. However,
in that case, the
The future is not all rosy, however, for the US generic industry. ANDA must include a
Raymond De Vre from McKinsey and Company warned the certification indicating
that the filer does
audience that the good times generic companies have enjoyed
not seek to market
over the past decade will end soon. While the global generics the product before
market shows attractive growth with significant patent expiries the expiry of the
for small molecules occurring in 2011 and 2012, there will Orange Book-listed
be fewer small molecule opportunities after 2012. Although patents (“paragraph
III certification”) or
biologics present a large opportunity for generics beyond 2010,
that the filer believes
the manufacturing and regulatory hurdles are high and it that its product
remains to be seen how many companies can realistically invest does not infringe the
in these products for the long term. Orange Book-listed
patents or that the
Mr. Silver expected industry consolidation to continue. Orange Book-listed
However, he predicted that the majority of M&A activity will patents are invalid
be focused outside the US. Certainly, there was a significant (“paragraph IV
amount of M&A activity in the second quarter, and, as seen in certification”).
the Notable Deals section of this report, there were a number of WHAT Are “A”
deals focused on emerging markets. rATeD DrugS?
“A” rated drugs
are considered
therapeutically
equivalent and can
be substituted for
each other. “A” rated
drugs are designated
as AA, AB, AN, AO,
AP, and AT in the
Orange Book.
PHARMA MATTERS | MOVERS AND SHAKERS

4. WHAT iS A SeCTiOn ii: AnDA ApprOvAlS
uS Dmf?
TOTAl ‘A’-rATeD AnDAS by COunTry Of Origin Of
A DMF (Drug Master AppliCAnT fOr April TO June 2010
File) is a confidential
document 62
covering a specific
manufacturing
facility, process or 44
article used in the
manufacturing,
processing,
packaging or storing
of a bulk drug. A DMF
is reviewed by the
11 10
FDA only if an ANDA
6
or NDA referencing 3 3 2 1 1 1 1 1 1
that particular DMF
is filed. An ANDA
or NDA will not be
A
A
Y
ZE E L
SW D
EN
N
S
Y
D
AU N
CA A
DA
AN
AL
approved until any
AN
ND
US
DI
RI
AN
AN
PA
A
RA
ED
NA
IW
RD
ST
IT
IN
JA
RM
LA
RL
EL
IS
TA
issues with the DMF
JO
IC
ER
GE
TH
IT
are resolved.
SW
NE
WHAT iS THe 180- During the second quarter of 2010, US-based companies
DAy exCluSiviTy? received the most Abbreviated New Drug Applications (ANDA)
In order to encourage approvals, with 62 approvals going to 24 groups. During
generic companies the same period, 19 Indian companies received a total of 44
to develop non-
infringing products
approvals. The approval numbers were considerably higher than
and challenge invalid during the first quarter, when US-based companies received 23
patents, the Hatch- approvals and Indian companies received 22 approvals.
Waxman act provides
the incentive of
grOupS WiTH THe mOST ‘A’-rATeD AnDA ApprOvAlS
180 days of market fOr April TO June 2010
exclusivity for the first
18
company to file an
ANDA with paragraph
IV certification for a
product. The FDA
may not approve
additional ANDAs for 9 9
a period of 180 days
commencing from 6 6 6 6
the first commercial 5 5
4 4 4
marketing of the
first-to-file product.
In cases where more
than one ANDA
with Paragraph IV
nc
nc
td
nc
G
d
G
p
td
d
d
KG
ou
Lt
Lt
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certification is filed
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im
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Lu
ar
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on the same day, the
at
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ar
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may be shared.
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Te
During the second quarter of 2010, Mylan (US) received 18 ANDA
approvals, putting the company on top of the list, followed by
Sagent (US) and Teva (Israel), each with 9 approvals.
PHARMA MATTERS | MOVERS AND SHAKERS

5. SeCTiOn iii: pArAgrApH iv CHAllengeS WHAT iS A
biOSimilAr
In the second quarter of 2010, we learned of the first Paragraph ACCOrDing
IV patent challenges on six new active ingredients or TO uS
combinations, down from 13 during the previous quarter. regulATiOnS?
grOupS WiTH THe mOST pATenT CHAllengeS On reCOrD A biosimilar
AS Of June 2010 product is defined
in the Act to mean
a biological product
152
that is both “highly
similar to the
reference product
notwithstanding
83 81 minor differences
62
in clinically inactive
60
components” and
43 41
35 34 for which “there
30 28 27 are no clinically
meaningful
differences between
the biological
product and the
Te
No
M
W
Ap
Su
Dr
Ac
Da
Lu
Pa
Im
yla
at
va
pi
ta
pa
rP
n
ot
iic
va
Re
so
n
Ph
vis
reference product in
n
ex
hi
Ph
xL
rti
ha
dd
Lt
n
La
ar
sA
Sa
In
Gr
ar
rm
ab
Ph
d
y's
bo
m
c
m
nk
ou
G
o
terms of the safety,
ac
ar
ac
Gr
ra
ra
ac
yo
p
m
e
eu
to
ou
to
eu
ut
Hf
ac
Co
rie
r
tic
ica
p
tic
purity, and potency
ie
eu
sI
Lt
al
sI
al
lC
tic
d
nc
nc
In
In
om
al
of the product.”
du
du
sI
pa
st
st
nc
rie
ni
rie
Interchangeability
es
sL
sL
In
td
td
c
is defined as a
biological product
that “may be
Teva continued to be by far the most prolific filer of ANDAs with substituted for the
patent challenges. At the time of writing this report, we were reference product
linking the company to challenges on 152 products, up from without the
149 products the quarter before. Novartis (Sandoz) and Mylan intervention of the
healthcare provider
were in second and third place, with links to 83 and 81 patent
who prescribed the
challenge products, respectively. reference product.”
PHARMA MATTERS | MOVERS AND SHAKERS

6. prODuCTS firST expOSeD TO pArAgrApH iv CHAllengeS, AS repOrTeD by
WHAT iS A
pArAgrApH iv THe fDA beTWeen April AnD June 2010
CHAllenge?
ACTive ingreDienT: • Perrigo has submitted an ANDA with Paragraph IV
Bioequivalent butoconazole nitrate certification for a generic version of Gynazole-1 (butoconazole
generic versions of
pOSTeD by fDA: nitrate) vaginal cream.
drugs that are not
June 8, 2010
protected by patents • The Orange Book lists two patents covering Gynazole-1
can be produced and brAnD nAme: vaginal cream.
marketed in the US by gynazole-1®
- US Patent 5,266,329 will expire on Nov. 30, 2010.
any company, subject
to FDA approval.
nDA HOlDer: - US Patent 5,993,856 will expire on Nov. 17, 2017.
Kv pharmaceutical
However, a generic
Company - KV has alleged that Perrigo infringes US Patent 5,993,856.
company may obtain
• At the time the first ANDA with Paragraph IV certification was
FDA approval before
patent expiry if it
submitted for a generic version of Gynazole-1 vaginal cream,
certifies its product Gedeon Richter, Mediolast, and Roche Palo Alto held DMFs
does not infringe for butoconazole nitrate.
the listed patents
or the patents are ACTive ingreDienT: • Apotex and Teva have submitted ANDAs with Paragraph
invalid (paragraph IV eletriptan IV certification for generic versions of Relpax (eletriptan
certification). Patent hydrobromide
hydrobromide) tablets.
holders may then sue
pOSTeD by fDA:
the ANDA filer for • The Orange Book lists two patents covering Relpax tablets.
June 8, 2010
patent infringement. If - US Patent 5,545,644 includes claims directed to the drug
the patent holder sues brAnD nAme:
the ANDA filer within relpax® substance, drug product, and the treatment of migraine
45 days of notification, with or without aura. It will expire on Dec. 26, 2016.
nDA HOlDer:
the FDA may not pfizer - US Patent 6,110,940 is directed to a crystalline form of
approve the ANDA for eletriptan hydrobromide. It will expire on Aug. 29, 2017.
30 months from the
date of notification. If - Pfizer has alleged that Apotex and Teva infringe US Patent
no suit is filed within 6,110,940. In its notification letter, Apotex asserted that its
45 days, the FDA may proposed product would not infringe the patent because
approve the ANDA at
it would contain an amorphous solid form of eletriptan
any time.
hydrobromide. Teva also indicated that its proposed
product would not contain the polymorphic form of
eletriptan hydrobromide claimed in US Patent 6,110,940.
• At the time the first ANDA was submitted for a generic
version of Relpax tablets, Teva and Apotex held DMFs for
eletriptan hydrobromide.
ACTive ingreDienT: • At least one company has submitted an ANDA with
eprosartan mesylate Paragraph IV certification for a generic version of Teveten
pOSTeD by fDA: (eprosartan mesylate) tablets. We do not know the filer’s
June 22, 2010 identity at this time.
brAnD nAme: • The Orange Book lists only one unexpired patent covering
Teveten®
Teveten tablets.
nDA HOlDer: US Patent 5,656,650 includes claims directed to the use of
Abbott
eprosartan stepwise or in physical combination with a diuretic for
the treatment of hypertension. It will expire on Aug. 12, 2014.
• At the time the first ANDA was submitted for a generic version
of Teveten tablets, Jubilant Organosys and Hetero Drugs held
the DMFs for eprosartan mesylate most likely to be referenced
in an ANDA.
PHARMA MATTERS | MOVERS AND SHAKERS

7. ACTive ingreDienT: • At least one company has filed an ANDA with Paragraph IV
ketoconazole certification for a generic version of Extina (ketoconazole)
pOSTeD by fDA: foam. We do not know the filer’s identity at this time.
may 18, 2010
• The Orange Book lists only US Patent 7,553,835 for Extina
brAnD nAme: foam. That patent includes claims to the drug product and its
extina®
use in the treatment of seborrhea dermatitis. It will expire on
nDA HOlDer: Oct. 19, 2018.
gSK
• At the time of the first ANDA submission for a generic version
of Extina foam, several companies held active DMFs for
ketoconazole. This is not surprising because other generic
ketoconazole products have been approved in the US for years.
ACTive ingreDienT: • Lupin has submitted an ANDA with Paragraph IV certification for a
ranolazine generic version of Ranexa (ranolazine) extended-release tablets.
pOSTeD by fDA: • The Orange Book lists 10 patents covering Ranexa extended-
June 8, 2010
release tablets, all expiring on May 27, 2019.
brAnD nAme:
Lupin’s ANDA for a generic version of Ranexa included
ranexa®
Paragraph IV certification to all 10 patents. Roche and Gilead
nDA HOlDer: have alleged infringement of nine of the patents.
gilead
• The FDA reported at least eight active DMFs for ranolazine
on file at the time the first ANDA was submitted for a generic
version of Ranexa extended-release tablets, including one
held by Lupin.
ACTive ingreDienT: • Mylan has filed an ANDA with Paragraph IV certification for a
sunitinib malate generic version of Sutent (sunitinib malate) capsules.
pOSTeD by fDA: • The Orange Book lists three patents covering Sutent capsules.
April 19, 2010
- US Patent 6,573,293 and US Patent 7,125,905 include both
brAnD nAme:
drug substance and drug product claims directed to Sutent
Sutent®
capsules. They will expire on Feb. 15, 2021.
nDA HOlDer:
pfizer - US Patent 7,211,600 claims the treatment of
gastrointestinal stromal tumors with sunitinib. It will expire
on Dec. 22, 2020.
- Pfizer has alleged that Mylan infringes all three listed
patents.
• At the time of the first ANDA submission for a generic version
of Sutent capsules, Teva held the only active DMF for sunitinib
malate reported by the FDA.
PHARMA MATTERS | MOVERS AND SHAKERS

8. SeCTiOn iv: nOTAble DeAlS
Much of the deal making activity in Q2 involved big
pharmaceuticals expanding their presence in rapidly
developing, emerging generic markets in India, Latin America,
and Japan.
AbbOTT
One of the most active deal makers in Q2 was Abbott. After
obtaining a diverse portfolio of branded generics products and
significant presence in emerging markets by acquiring Solvay
Pharmaceuticals at the beginning of the year, Abbott agreed to
pay $3.72 billion for Piramal Healthcare’s Indian formulations
business in May and announced collaboration with Zydus
Cadila. The acquisition, which also gives Abbott a production
facility at Baddi, is expected to close during the second half of
2010. According to Abbott, the deal will give them the No. 1
position in the Indian pharmaceutical market.
The collaboration agreement between Abbott and Zydus
Cadila covers the development and commercialization of
branded generics in 15 emerging markets. Initially, Abbott will
commercialize 24 products from the Zydus portfolio with an
option to commercialize more than 40 other products. The
products cover a number of therapeutic areas, including pain,
cancer, respiratory, neurological, and cardiovascular diseases.
pfizer
Pfizer, meanwhile, announced in May that it had entered into
two more collaboration agreements with Strides Arcolab
of India. Recall that in January, Pfizer expanded an earlier
arrangement with the Indian generic company, Strides
Arcolabs, for the supply of 40 off-patent products, including
mostly injectable anti-cancer treatments. One of the May
agreements covers 38 generic oncology products which Pfizer
will commercialize in the EU, Canada, Japan, Korea, Australia,
and New Zealand. The second agreement involves Pfizer
commercializing niche sterile injectables in the US
SAnOfi-AvenTiS
In the second quarter, Sanofi-Aventis announced a joint venture
with Japan’s Nichi-Iko to boost its profile in the fast-growing
generic drug market in Japan. The company’s goal is to be in
the top five generic drug producers in the Japanese market
within five years. For more information about the opportunities
and challenges foreign companies face in pursuing Japan’s
generic market, download our white paper, The Japanese
Generic Drug Market: Opportunities and Strategies for Success, at
go.thomsonreuters.com/japanese_whitepaper.
PHARMA MATTERS | MOVERS AND SHAKERS

9. glAxOSmiTHKline
GlaxoSmithKline expanded its business in Latin America by
acquiring Laboratorios Phoenix in Argentina. Phoenix has a
broad portfolio of branded generics covering therapeutic areas
including cardiovascular, gastroenterology, metabolic, and
urology. The deal also includes a manufacturing facility near
Buenos Aires.
vAleAnT
Not to be outdone by big pharma, generic companies also were
involved in significant deal-making, with Valeant, a branded
generics and specialty pharmaceutical company based in
California, standing out. The company, which agreed to merge
with Biovail of Canada in June, completed its acquisition of New
Jersey’s Aton Pharma in May, and announced an agreement
to acquire a Canadian OTC company called Vital Science Corp
in April. Also in April, Valeant announced an agreement to
acquire yet another privately held branded generics company
in Brazil. Within the last 12 months, Valeant has acquired
Bunker Industria Farmacêutica Ltda and Instituto Terapêutico
Delta Ltda in Brazil, along with Tecnofarma SA de CV and
Laboratorios Grossman SA in Mexico.
OTHer
Other major deals by generic companies in the second quarter
included the definitive agreement for Sandoz to acquire Oriel
Therapeutics, a privately-held US specialty pharmaceutical
company focused on respiratory care. This acquisition will give
Sandoz exclusive rights to a portfolio of generic candidates,
three development projects, Oriel’s FreePath drug delivery
system, and Solis multi-dose dry powder inhaler, which uses
the FreePath technology. It has been reported that FreePath
has the potential to address some of the hurdles facing
regulatory approval of generic inhaled medicines in the US
In May, Endo announced an agreement to acquire
HealthTronics, a leading US provider of urological products
and services. The deal is part of Endo’s strategy to diversify and
expand its offerings of urology products.
Orchid, an Indian generic company, is trying to buy Karalex, a
sales and marketing operation in the US The company needs an
increased US-based sales capability in order to take advantage
of its pipeline, which includes patent challenge products that
Orchid is believed to have been the first to file for, and is thus
entitled to exclusivity. Karelex was founded in 2007 by two
former executives of Par Pharmaceutical.
PHARMA MATTERS | MOVERS AND SHAKERS

10. SeCTiOn v: Opening mOveS
Based on our research of ANDA filings and Paragraph IV
challenges, we highlight some of the companies making
significant game play in the US generics industry.
ipCA lAbOrATOrieS lTD.
Ipca is a fully integrated pharmaceutical company based in
Mumbai, India, making both finished dose products and active
pharmaceutical ingredients for many international markets.
Ipca’s active pharmaceutical ingredients (API) manufacturing
facility at Ratlam has been inspected by the US FDA on a
number of occasions. The company sells numerous APIs from
that facility to the US market. Its dose facility has also been
inspected by the US FDA.
Ipca, which holds 10 active ANDAs, has so far launched most of
its products to the US market through alliances.
In 2006, Ipca entered into a strategic alliance with Ranbaxy
Pharmaceuticals Inc. (now part of Daiichi). Under this alliance,
the products were going to be marketed by Ranbaxy. Initially
the dose products were going to be manufactured by Ranbaxy
using Ipca’s active ingredients. Subsequently, both the API
and finished dose were going to be manufactured by Ipca. The
alliance covered a number of products, including atenolol,
furosemide, hydrochlorothiazide, hydroxychloroquine sulfate,
metformin HCl, and metoclopramide. The ANDA for metformin
has since been discontinued.
In 2007, Ipca entered into another strategic alliance focused
on the US market, this time with Heritage Pharmaceuticals of
New Jersey. Under the terms of the agreement, Ipca was going
to develop, register, and manufacture the products, including
propranolol, and Heritage would sell and market them in the US
inTellipHArmACeuTiCS inTernATiOnAl inC.
Intellipharmaceutics of Toronto, Canada, specializes in the
research, development, and manufacture of both novel and
generic controlled-release and targeted-release oral solid
dosage drugs.
The company is currently involved in a number of patent
challenges in the US One of the challenges was in
partnership with Par Pharmaceutical for a generic version
of the Attention Deficit Hyperactivity Disorder (ADHD) drug
Focalin XR® (dexmethylphenidate hydrochloride). In May
2010, the parties stipulated to the dismissal of the litigation.
Intellipharmaceutics’ management expects that marketing of
its generic version of Focalin XR would commence no sooner
than Q4 2012.
PHARMA MATTERS | MOVERS AND SHAKERS

11. Intellipharmaceutics’ partnership with Par Pharmaceutical
goes back several years. In November 2005, the two companies
announced an agreement for the US market to co-develop
controlled release formulations of generic drug products. In
August 2007, Par Pharmaceutical purchased a 4.2 percent
equity interest in Intellipharmaceutics and the two companies
entered into another agreement regarding the development
and launch of controlled release generic drug products,
bringing the total number of drugs under development to six.
In May 2010, Intellipharmaceutics announced that the US FDA
had accepted its filing for an ANDA for a generic version of the
antidepressant Effexor XR® (venlafaxine hydrochloride). On
June 14, 2010, the company announced it had filed an ANDA
for a generic version of Protonix® (delayed release pantoprazole
sodium). The company has since then been sued by Wyeth
LLC, a wholly owned subsidiary of Pfizer Inc., regarding
its venlafaxine application. The company also has generic
carvedilol and seven undisclosed products in its pipeline.
PHARMA MATTERS | MOVERS AND SHAKERS

12. NOTES
PHARMA MATTERS | MOVERS AND SHAKERS

13. NOTES
PHARMA MATTERS | MOVERS AND SHAKERS

14. Image CopyrIght: reuTerS/David gray
NeWport US marKet Share moDULe
Deeper INSIght INto the WorLD’S LargeSt
pharmaCeUtICaL marKet
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