The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Biotech Trends Update — IP Constituencies: Endo’s Qualitest Purchase Shows Full Integration of Innovator and Generic Strategies

Endo Pharmaceuticals (NASDAQ: ENDP) announced yesterday morning that it will spend $1.2 billion to buy U.S. generics company Qualitest Pharmaceuticals. Endo also has an active pipeline of “innovative” products in development, emphasizing the industry trend we’ve been following of a narrowing distinction between innovator and generics companies.

Endo began its modern existence after being spun out of DuPont Merck in 1997, where it had been that company’s generics division. Instead of continuing in as a pure generics company, though, Endo in-licensed Lidoderm in 1998 and since then has mixed generics and innovative programs with wanton disregard for the traditional industry divide. In fact, Endo’s planning seems to be focused more on product classes than on patent status. The Qualitest purchase, for example, was framed as an expansion of their pain franchise. Another example of Endo’s non-traditional aggregation is pairing the Bioniche license for Urocidin (an innovative bladder cancer product in Phase III) with their purchase of HealthTronics (a urology services and equipment company).

As companies like Endo look to replace revenue from expiring patents, don’t expect them to do it in traditional ways or by sticking to traditional silos. Check out other examples here, or point me to others in the comments.

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One response to “Biotech Trends Update — IP Constituencies: Endo’s Qualitest Purchase Shows Full Integration of Innovator and Generic Strategies

  1. Wayne Schnarr September 29, 2010 at 9:41 am

    In the 1970s/early 80s, almost every brand pharma company had a generic or non-branded division. Then the blockbuster drugs started to appear, with their extraordinary growth and the corresponding increase in company share prices. The stable revenue but limited growth from generic products was not the best use of corporate reources and was actually a drag on their share prices. Accordingly, the generic divisions were sold or closed.
    Thirty years later, every pharma company would like to have that large stable revenue base which would mitigate the sales decline as the blockbusters lose market exclusivity. J&J has always been a diversified healthcare company with a strong consumer products base, enhanced by the purchase of the Pfizer consumer products assets. Novartis has its Sandoz division, the second largest generic group. Teva is moving to the same endpoint but starting from its position as the largest global generic company.
    If the big pharma companies start to get portfolios dominated by biologicals with long periods of market exclsuivity, will we see the divestiture of the generic divisions all over again?

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