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Pharmaceuticals: FDASIA seeks timeline extension for tentative ANDA nod

Nirmal Bang | 22 Oct, 2012  | Follow Author | Add to my Favourites 
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In addition to establishing new user fees statutes for generic drugs and biosimilars, the Food and Drug Administration Safety and Innovation Act (FDASIA) – signed by US President Barack Obama in July 2012 – seeks an extension of timeline for ANDA (abbreviated new drug application) tentative approval from 30 months to 40 months in case of a Paragraph four (Para IV) filing along with first-to-file (FTF) status. Nirmla Bang believes this is positive for innovator companies (as early generic competition in case of 180-day marketing exclusivity forfeiture may lead to immediate price erosion), as well as generic players - as they currently run the risk of marketing exclusivity forfeiture in case their ANDA filing does not get a tentative approval within 30 months (median average time currently for ANDA approval is 32-33 months) of being sued by the innovator company for patent infringement.

FDASIA seeks extension of tentative approval timeline: FDASIA has sought that the time required to obtain tentative approval or TA (or final approval if TA is unwarranted) in case of a Para IV certification with FTF status to be extended from: a) 30 months to 40 months for applications whose 30-month stay expires between 9 July 2012 and 30 September 2015, and b) 30 months to 36 months for applications whose 30-month stay expires between 1 October 2015 and 30 September 2016. This period would be gradually phased back down to 30 months as the US Food and Drug Administration (USFDA) eliminates the backlog of ANDA filings (estimated at 2,500).

Both innovator as well as generic companies to benefit: Nirmal Bang believes this provision is positive for innovator as well as generic companies. In case of forfeiture of marketing exclusivity for a FTF player, generic competition will creep in sooner than expected and lead to severe price erosion (as against if the marketing exclusivity is upheld). For generic companies, it abates the risk of marketing exclusivity forfeiture in case their ANDA filing doesn’t get a tentative approval within 30 months of being sued by the innovator (median approval time is 32-33 months).

Ranbaxy Laboratories most exposed to this risk among Indian generic players: Among Indian generic players, Nirmal Bang believes Ranbaxy Laboratories (RLL) is highly exposed to this risk. In the recent past, RLL was at risk of losing Lipitor (cholesterol lowering drug) marketing exclusivity due to non-receipt of TA within 30 months (it was ultimately received). In another instance, Sandoz sued the USFDA in June 2012 to forfeit RLL’s marketing exclusivity for Nexium due to delay in receiving the TA (received one day after the 30-month window got over). Similarly, Mylan sued the USFDA last month to forfeit RLL’s marketing exclusivity for Diovan (hypertension and congestive heart failure drug, as it failed to receive TA within 30 months).

Divis Laboratories is our top pick: Nirmal Bang remains cautious on the pharmaceuticals sector owing to higher valuation and prefer a bottom-up approach. Divis Laboratories remains their top pick from the sector.

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About Nirmal Bang

Founded in 1986 by Nirmal Bang, the Nirmal Bang is recognized as one of the largest retail broking houses in India, providing an array of financial products and services. Their retail and institutional clients have access to products such as equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS. The Group is headed by Mr. Dilip Bang and Mr. Kishore Bang.

For more information please write in to [email protected]

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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