Obscure Patent Could Save Eli Lilly Billions

by Christopher Freeburn | January 4, 2013 9:55 am

prescription drugs[1]A little known patent attached to a cancer treatment could help Eli Lilly (NYSE:LLY[2]) extend the company’s exclusive rights to make the drug for half a decade[3].

Keeping generic versions of Alimta off the market for five years could translate into $15 billion in revenue for the pharmaceutical maker, Reuters notes.

The patent in question covers the way the drug is given to patients and is separate from the usual patents involved with drugs. While such method-of-use patents are typically less robust than basic patents, Alimta’s method-of-use patent reflects highly specific safety guidelines also found on the drug’s label. Generic-drug makers are challenging the patent in court.

If the patent is upheld, generic versions of Alimta couldn’t be labeled with the same instructions. That could hamper patient safety, leading regulators to withhold approval of generic versions.

That could give the Alimta method-of-use patent firmer standing in court. While most legal experts remain unconvinced, some believe the patent could very well be upheld, meaning Alimta wouldn’t face generic competition until 2022.

That would be a windfall at a time Lilly is facing the loss of patent protection on a number of its best-selling drugs. Investors liked that prospect, sending Lilly shares up more than 2% in Friday morning trading.

  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/prescription-drugs.jpg
  2. LLY: http://studio-5.financialcontent.com/investplace/quote?Symbol=LLY
  3. extend the company’s exclusive rights to make the drug for half a decade: http://www.reuters.com/article/2013/01/04/us-lilly-alimta-idUSBRE90305J20130104

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