Moody’s to drug makers: Be mindful of your credit rating
NEW YORK Drug makers could see a dip in their credit ratings as they pile on debt amid a wave of patent expirations, one of the country’s top credit-rating agencies said Thursday.
Moody’s Investors Service said in a report that rated pharmaceutical industry debt rose by 117%, to $270 billion, at the end of 2009, from $124 billion at the end of 2006. Still, strong profit margins and cash flow have left the pharmaceutical industry’s credit in a stronger position than that of other industries, according to the report.
“The rise in industry debt leaves reduced cushion in credit metrics, making pharmaceutical ratings vulnerable to ongoing downward pressure,” Moody’s SVP Michael Levesque said.
Levesque said this would mean drug companies’ ability to buy up other companies without hurting their credit scores would be reduced, but acquisitions will likely increase as drug companies seek to make up for lost profits from expiring patents for their drugs, a trend that will accelerate starting late next year.
Perrigo to manufacture Analpram HC for Ferndale Labs
ALLEGAN, Mich, Ferndale Labs has named generic drug maker Perrigo as the manufacturer of an authorized generic version of a topical skin cream, Perrigo announced Thursday.
The drug, Analpram HC, is a topical anesthetic and corticosteroid for relieving inflammatory and pruritic forms of corticosteroid-responsive dermatosis. Under the deal, Perrigo will also have the opportunity to distribute authorized generics of other Ferndale drugs.
“We are excited that Ferndale has chosen Perrigo as their preferred partner for authorized generics,” Perrigo chairman and CEO Joseph Papa said.
Par wins Zegerid patent suit
WOODCLIFF LAKE, N.J. The U.S. District Court for the District of Delaware has ruled in favor of generic drug maker Par Pharmaceutical in a patent litigation suit over a drug used to treat acid reflux, Par announced Thursday.
The court ruled that the University of Missouri’s patents covering omeprazole and sodium bicarbonate capsules in the 20-mg/1.1-g and 40-mg/1.1-g strengths and oral suspension powders in the 20-mg/1.68-g and 4- mg/1.68-g strengths are invalid. The Food and Drug Administration recently was granted tentative approval for both strengths of the capsule version.
Omeprazole and sodium bicarbonate is a generic version of Santarus’s drug Zegerid. Patents for the capsules and oral suspension powder are set to expire in 2016, according to FDA records. According to Santarus financial data, Zegerid capsules and oral suspension powder had combined sales of $119.3 million in 2009.
Santarus said Wednesday that it would appeal the District Court’s decision to the U.S. Court of Appeals for the Federal Circuit.