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Watson, Barr Tangle Over Birth Control Pill Seasonique

Drug maker Watson Pharmaceuticals Inc., located just over the county line in Corona, is being sued by a rival over Watson’s bid to make a generic birth control pill.

Duramed Pharmaceuticals, a Cincinnati-based unit of Barr Pharmaceuticals Inc., sued Watson in federal court late last month. Duramed claims Watson infringed on its patent for Seasonique, a birth control pill.

Seasonique is a newer version of Duramed’s Seasonale brand.

Watson had filed an application with the Food and Drug Administration to produce a generic version of Seasonique.

Montvale, N.J.-based Barr said it filed the suit to enforce the Seasonique patent and to prevent Watson from marketing any competitors before the patent’s expiration in 2024. If Barr loses, Seasonique could face competition by 2009.

This is not Duramed’s first lawsuit against Watson. In December, it filed a patent infringement suit against Watson and Sandoz, a unit of Novartis AG of Switzerland, on behalf of Seasonale.

Separately, Watson and 10 other drug makers, including Abbott Laboratories Inc. of suburban Chicago, agreed to a $125 million settlement of a lawsuit filed by consumer groups and insurance companies in 2002. That suit alleged that the drug makers inflated wholesale prices for some drugs.

Allen Chao, Watson’s founder and executive chairman, is an Anaheim Hills resident who’s made large donations to the University of California, Irvine. The Chao Family Comprehensive Cancer Center at UC Irvine is named after the executive and his family members.


Apria Dinged on Medicare

Apria Healthcare Group Inc.’s shares fell last week on word that a Deutsche Bank analyst downgraded the home healthcare provider.

Shares of Lake Forest-based Apria closed down 5% on March 10 with a market value of $830 million.

Apria was downgraded to “sell” by analyst Darren Lehrich, who cited concerns that Medicare reimbursement for breathing treatments delivered to patients in their homes would be reset “substantially lower” because of competitive contract bidding.

“We believe the oxygen sector faces significant Medicare pricing risk over the next 12 to 18 months, and an important near-term catalyst will be the announcement of competitive bidding contract pricing,” Lehrich said in a research note.

As oxygen pricing becomes known, “we expect investors to quickly extrapolate how pricing may settle out longer-term,” Lehrich said.

Medicare’s bidding plan for oxygen is being rolled out in 10 areas, and Lehrich said he expects 70 more areas, including Orange County, to come on board with the pricing in 2009.

Deutsche Bank lowered its 2008 profit estimate for Apria to $92.9 million from a previous projection of $94.6 million.

The bank’s view is above consensus Wall Street earnings estimates of $92 million.

Apria has said it expects to post a full-year profit of $89.4 million to $93.7 million.


Researchers Probing Obesity

Researchers at California State University, Fullerton and the University of Florida are teaming up to look at Prader-Willi syndrome, a genetic disorder that often results in morbid obesity.

Faculty members are going to look at children with the disease, which affects one in every 12,000 to 15,000 children. In particular, they will look at how Prader-Willi can be managed through exercise.

“The idea is to see how children with Prader-Willi respond to two different kinds of exercise,aerobic and resistance-based,” said Daniela Rubin, a Cal State Fullerton assistant professor of kinesiology and the study’s lead researcher.

CSUF researchers will collect blood samples of study participants in conjunction with Children’s Hospital of Orange County. Researchers at the University of Florida’s College of Medicine will look at participants’ metabolism, endocrine, hormonal and metabolic responses to exercise.

The research is being funded by an $895,000 grant from the U.S. Medical Research Agency.


BioLase Renews Schein Deal

BioLase Technology Inc., an Irvine maker of dental laser devices and Henry Schein Inc., a New York-based healthcare product distributor, said earlier this month that they renewed their multiyear distribution contract.

The renewed deal calls for BioLase’s sales and service groups to work with Henry Schein to market, sell and service BioLase’s dental laser system products, including the Waterlase, which is used to cut patients’ bone and mouth tissue.

Henry Schein remains the exclusive distributor of BioLase’s lasers, accessories and services in the U.S. and Canada.

Both BioLase and Henry Schein “are now focused on how we can build on what we have learned in the past year and develop specific plans to improve market adoption, take costs out of the distribution network and continue to improve the local coordination between our sales teams,” said Jake St. Philip, BioLase’s chief executive, in a release.

Prior to the renewal, BioLase’s distribution deal with Henry Schein had hit some speed bumps. Some analysts had said that Henry Schein sales representatives were hesitant to promote BioLase’s Waterlase because dentists were unfamiliar with the product.

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