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Merck signs deal for Fosamax authorized generic
  By Ransdell Pierson
NEW YORK (Reuters) - Merck & Co Inc said on Friday it had signed a deal for an authorized generic form of its blockbuster Fosamax osteoporosis drug, to become available after the U.S. patent on the world's top-selling osteoporosis drug lapses on February 6.
"We can confirm an authorized generic deal for Fosamax has been signed, although specific details of the deal are proprietary," said Merck spokesman Ron Rogers.
Fosamax, whose chemical name is alendronate, has global annual sales of about $3 billion. Now available in a once- weekly formulation, it was the first member of the widely used family of treatments known as bisphosphonates that inhibit cells called osteoclasts that break down bone tissue.
An authorized generic is a copycat form of a company's branded medicine that is sold through a licensing agreement, usually with a generic-drug manufacturer. Such deals allow the original seller of a branded drug to hold on to a greater revenue stream from the medicine once it loses patent protection and becomes prey to competition from generics.
An authorized generic can significantly hurt sales of rival generics waiting to be launched once a branded drug's patent lapses.
Analysts have said cheaper generics will not only batter sales of Merck's branded Fosamax, but could hurt rival once- weekly bisphosphonate Actonel -- which is sold by Procter & Gamble Co and French drugmaker Sanofi-Aventis.
Boniva, a newer bisphosphonate sold by Roche Holding AG and GlaxoSmithKline Plc, is only taken once a month.
"I think generic Fosamax should do some damage to Actonel, but the impact to Boniva should be much less because Boniva is more differentiated as a once-monthly pill," said Shaojing Tong, an analyst with Mehta Partners.
Barr Pharmaceuticals Inc said on Friday it plans to launch its generic of the basic 70 milligram form of Fosamax on February 6.
A spokeswoman for Barr said the company expects Israeli drugmaker Teva Pharmaceutical Industries Ltd to launch its own generic about the same time and that Barr and Teva would share 180-day marketing exclusivity for their products. Teva officials did not return a Reuters call.
Typically, the first generic-drug maker to seek approval of a generic form of a branded medicine is entitled to six months of marketing exclusivity in the United States, assuming its product is approved. But an authorized generic upsets that lucrative scenario. Fosamax is also sold in a formulation that is combined with either 2800 units or 5600 units of Vitamin D, a nutrient that supports bone and other tissues.
The formulation with the lower dose of Vitamin D will lose U.S. patent protection two months after basic Fosamax, while the combination product containing the higher dose of Vitamin D will be patent-protected through 2010, according to Merck's Rogers.
Cowen and Co forecast in July that 85 percent of U.S. prescriptions for alendronate and up to half of international prescriptions will be generic this year.
It forecast global sales of Fosamax would plunge to $1.85 billion in 2008, hurt by the generics, and decline to $800 million in 2009.
Barr shares closed down 10 cents at $54.96 on the New York Stock Exchange, while Teva shares rose 1.2 percent to $47.98 on the Nasdaq. Merck shares rose 8 cents to $60.55 on the NYSE.
(Reporting by Ransdell Pierson; editing by John Wallace/Andre Grenon)
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