Important note: Information in this article was accurate in 1991. The state of the art may have changed since the publication date.
Los Angeles Times (LT) - FRIDAY April 19, 1991; Edition: Home Edition Section: Business Page: 1 Pt. D Col. 5 Word Count: 611
VICTOR F. ZONANA; TIMES STAFF WRITER
On Thursday, Barr Laboratories Inc. said that it will contest Burroughs' patents covering AZT and that it has asked the Food and Drug Administration for permission to manufacture a generic version of the expensive drug.
Burroughs has been under almost constant attack from AIDS activists and government officials since the drug was approved for use in March, 1987, and priced by the company at about $10,000 a year.
Two price cuts and a reduction in the recommended dosage have brought the annual cost of treatment down to about $3,000 a year. Still, with worldwide sales totaling $286 million in the fiscal year ended Aug. 31, 1990, the drug is a lucrative target for generics manufacturers.
Barr, which is based in Pomona, N.Y., and had total sales of $70.3 million in the fiscal year ended June 30, 1990, said that if it prevails, it will market its version of AZT for between one-half and two-thirds the price charged by Burroughs.
Barr isn't alone in challenging the validity of Burroughs' patents on AZT, which the company markets under the name Retrovir. Apotex Inc., a Canadian company whose controlling shareholder holds a 65% stake in Barr, has asked courts there to quash Burroughs' patents.
Apotex already sells a generic version of the drug in countries, including the Bahamas, that don't recognize U.S. and Canadian drug patents.
And last month, the New York-based People With AIDS Health Group and two individuals brought suit against Burroughs and the U.S. government in an attempt to invalidate the Burroughs patents.
The plaintiffs, represented by the Ralph Nader-founded group Public Citizen, charged that Burroughs did not invent the drug and that its effectiveness against HIV, the virus that causes AIDS, was demonstrated by government and university scientists.
"We continue to be confident in our patent position and will defend it against any challenge," said Sharon Haggerty, a spokeswoman for Research Triangle Park, N.C.-based Burroughs. The company is a wholly owned subsidiary of the London-based Wellcome Foundation Ltd.
Analysts who follow the pharmaceutical industry said they expect Burroughs to prevail in the patent litigation. "It's a convoluted patent situation, but I put this in the don't-hold-your-breath category," said Jerry Treppel, managing director of Furman Selz Inc. in New York.
"Our investment scenario is that Burroughs will prevail," added Deborah Dzierzeski, pharmaceuticals analyst at Smith Barney, Harris Upham & Co. "The real issue for Burroughs is that AZT sales growth appears to have stalled out. . . . They have not had great success penetrating the larger population" of HIV-infected individuals without symptoms.
"We expect Retrovir sales to be flat to slightly up in Wellcome's first half," which ended Feb. 28 but whose results won't be announced until next month, she added.
BURROUGHS WELLCOME AT A GLANCE
Burroughs Wellcome Co., based in Research Triange Park, N.C., is a wholly owned subsidiary of Wellcome Foundation Ltd. of London, England.
Worldwide sales of AZT for fiscal year ended Aug. 31:
(in millions) 1987: $ 25 1988: $159 1989: $225 1990: $286
(Note: AZT, whose brand name is Retrovir, was approved as a treatment for AIDS in March, 1987, by the U.S. Food and Drug Administration)
Principal Products: Retrovir (AZT), for HIV infection; Zovirax (acyclovir), for herpes simplex and shingles
Over-the-counter medications include: Actifed, Sudafed, Neosporin ointment
Burroughs Wellcome Co. employees: 4,400 Wellcome Foundation employees: 19,000
Wellcome PLC worldwide sales in year ended Aug. 31:
1990: $2.48 billion 1989: $2.36 billion
Wellcome PLC net income in year ended Aug. 31:
1990: $325 million 1989: $279 million
CAPTION: Chart: BURROUGHS WELLCOME AT A GLANCE
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