OXFORD BIOMEDICA (OXB): MODERATED CHART AND DISCUSSION THREAD

From today's Times:

AZ' s value plunges by £2bn as it loses patent on top drug
Christine Seib



AstraZeneca, Britain’s second-biggest drugs group, saw almost £2 billion wiped off its market value yesterday after it lost the patent on its best- selling medicine.
It was the second blow to the group in two days, after David Brennan, the chief executive, cast doubt on Monday on the prospects for one of AZ’s few remaining drugs in the late stages of development.



AZ’s shares closed more than four per cent, or £1.93 billion, lower yesterday to leave its market capitalisation at £41.9 billion after the the European Patent Office (EPO) revoked a substance-of-matter patent on Nexium. The drug, used to treat gastro-oesophageal reflux and ulcers, enjoyed worldwide sales of $4.6 billion (£2.4 billion) last year.

The EPO’s decision follows a five-year battle by Ratiopharm, a German generic drugs maker, to shake AZ’s hold on Nexium, the third-biggest-selling medicine in the world.

Ratiopharm first challenged the “novelty and inventiveness” of Nexium’s active ingredient, esomeprazole magnesium salt, in 2001. Its argument was rejected by the EPO in 2003. Yesterday, however, the EPO upheld a 2004 appeal by Ratiopharm, although it will not give its reasons for the ruling until next year.

A spokeswoman for AZ said that yesterday’s decision was not open to appeal but that the UK company would vigorously defend other patents it held on Nexium and its active ingredient. AZ has process, method of use and additional substance patents that cover the drug from 2009 to 2019. The revoked patent had not been due to expire until 2014.

Shares in AZ fell 5.8 per cent to a nine-month low of £27.07 but recovered to close 4.4 per cent lower at £27.38. Peter Cartwright, an analyst at Evolution Securities, said that the fall reflected the fact that Nexium represented 4 per cent of AZ’s European earnings. The EPO’s decision would make AZ’s other patents on Nexium more vulnerable. “The substance-of-matter protection is the hardest to beat, the ones after that are easier to get around,” he said.

On Monday Mr Brennan said that there was a “low probability of success” on AGI-1067, an experimental treatment for hardening of the arteries, one of a few drugs left in AZ’s pipeline of advanced new products.