Par Pharmaceutical Cos. has closed its $410 million deal for Irvine-based generic drug maker Anchen Pharma-ceuticals Inc.
Woodcliff Lake, N.J.-based Par bought Anchen to expand its generic drug offerings as a number of patent expirations approach.
Figures from Los Angeles industry research firm IbisWorld Inc. show that eight of the 20 top-selling drugs in the U.S. last year will lose their patent protection in 2012. It’s considered by many to be the biggest wave of patented drugs to go generic, and expected to lead to price cuts of 40% to 80% on many of the most commonly prescribed medicines.
Anchen has about 200 workers and develops generic drugs on a niche basis. Its products include generic versions of the popular antidepressant Wellbutrin XL and Cipro, a drug that’s used to treat bacterial and anthrax infections.
Par has said that Anchen is profitable and expects to introduce eight to 10 niche generic drugs over the next two years.
The Anchen deal comes just as the wave of patent expirations hits. For example, Lipitor, a cholesterol drug that brings in more than $7 billion for its maker, New York-based Pfizer Inc., will go off patent at the end of November.
New York-based Bristol-Myers Squibb Co.’s blood thinner Plavix, which is the third-best seller in the country—and costs $750 at its highest dose—is set to go generic next year. So is Japan-based Takeda Pharmaceutical Ltd.’s Actos for type 2 diabetes.
Industry experts say that the coming generic wave of drugs will benefit older patients, many of whom take Lipitor, Plavix and Actos, plus other drugs, and are often on fixed incomes.
Par competitors include Israel-based Teva Pharmaceutical Industries Ltd., which has an operation in Irvine, Mylan Inc. of Canonsburg, Pa., and Watson Pharmaceu-ticals Inc., a drug maker founded by Anaheim Hills resident Allen Chao and now based in New Jersey.
Generic drug makers also could get some assistance from Congress.
Earlier this month, Sens. Jeff Bingaman, D-New Mexico, and David Vitter, R-Louisiana, introduced a bill that would amend the Hatch-Waxman Act. The law was originally intended to allow generic drug companies to challenge drug patents if they thought they were weak.
Generic companies that challenged patents and won were rewarded with a six-month window of exclusivity to sell their own version of the drug.
But one result of the window is that brand-name and generic drug makers will often settle patent suits with deals to keep generics off the market for a certain length of time. The deals keep other generic companies from offering cheaper versions, critics say.
Bingaman and Vitter’s bill would permit any generic company—not just the one that pressed the claim—to enter the market. Backers of the bill say it would end what’s called “pay-for-delay” deals, which also have drawn challenges from the Federal Trade Commission on antitrust grounds.
Apria Transition Update
Lake Forest-based home healthcare provider Apria Healthcare Group Inc. has said this is a “transitional year” as it continues to rework how it bills and collects for its services. Apria provides breathing treatments and other medical services to patients in their homes.
Chris Karkenny, the company’s chief financial officer, brought Apria’s efforts up to date during the company’s third-quarter financial conference call earlier this month.
Last year, Apria decided to reverse a decision to outsource some of its work to India.
Apria has finished hiring and training billing and collections workers but is still waiting for full results.
“There is a lot of logistics involved in bringing back the different functional areas,” Karkenny said. “Just because we have actually completed the hiring, doesn’t mean that it is completely functional and working the way we would like it. I would say we are in the third or fourth inning of this, and it is going as we anticipated and expected.”
As for Apria’s financial results, it lost $4.7 million in the quarter, compared to a $100,000 loss in the year-ago quarter.
Quarterly revenue rose 11% to $584.9 million. Apria said the revenue growth came from more home infusion therapy sales as well as its earlier deal for the home healthcare division of Danbury, Conn.-based industrial gas maker Praxair Inc.
Apria was once one of Orange County’s highest-profile public companies, but that changed three years ago when New York private equity firm Blackstone Group LP took it private in a $1.6 billion buyout.
The company has generally stayed out of the limelight since going private, but some details about it are released for the benefit of bondholders.
Bits and Pieces:
Kareo Inc., an Irvine-based healthcare software company, said it started offering electronic patient statements and a payment portal for doctors. Kareo is working with InstaMed Inc. on the offering. InstaMed is a healthcare information technology company with offices in Newport Beach and Philadelphia. … Mark Laret, former chief executive of UCI Medical Center in Orange, has been elected chair of the Association of American Medical Colleges. Laret is now chief executive of UCSF Medical Center and UCSF Benioff Children’s Hospital in San Francisco. … Hoag Hospital Foundation in Newport Beach has three new board members: Robert Brunswick, chief executive of Buchanan Street Partners; Pei-Yuan Chia, chairman of the Chia Family Foundation; and Stephanie Nichols McClellan, a gynecologic surgeon.
