Perrigo cuts to the front of the queue for launching private-label versions of OTC Allegra , acquiring from Teva the exclusive U.S. sales and distribution rights to generic equivalents of the allergy drug.

The private labeler expects to seize about 30 percent of the market from Sanofi-Aventis' Allegra (fexofenadine 180 mg and 60 mg) and Allegra D-12 Hour (fexofenadine 60 mg and pseudoephedrine 120 mg) soon after launching its private-label versions, with hopes of eventually reaching up to 50 percent penetration of the fexofenadine market, a Perrigo spokesman said.

The Allegan, Mich.-based firm June 29 announced its deal with Teva, which has approval for generic prescription Allegra products.

Perrigo's spokesman said Rx Allegra generated about $2.1 billion in prescriptions in 2005, but has since dropped to about $900 million annually due to generic competition.

Sanofi applied with FDA to switch Allegra and is expected to launch the pending OTC through its consumer health product subsidiary Chattem (¹ Also see "Perrigo Benefits From McNeil Recall, Prepares Infant Formula Launches" - Pink Sheet, 3 May, 2010.).

Perrigo's spokesman said the Allegra switch could get the green light by March 2011, with Teva's abbreviated new drug application likely to follow suit quickly.

Perrigo and others do not expect FDA to grant branded Allegra any period of market exclusivity. Collins Stewart analyst Louise Chen said additional indications in the OTC realm for non-sedating antihistamines - through which Sanofi could gain some period of exclusivity for the switched products - do not appear likely.

With Johnson & Johnson's Zyrtec (cetirizine) and Merck's Claritin (loratadine) approved for OTC use, the category already has generated a good deal of safety and efficacy data, and FDA is not expected to request additional studies on those aspects from Sanofi (² Also see "Sanofi Needs Switch Skills To Span Gap Between Rx And OTC Divisions" - Pink Sheet, 4 January, 2010.).

It appears unlikely Sanofi will have grounds for suing generic competitors once Allegra equivalents emerge.

Israel-based Teva launched generic Rx Allegra at risk in 2005 and the fexofenadine/pseudoephedrine product in November 2009 after settling Paragraph IV/Hatch-Waxman litigation with Sanofi over both products in 2008 (³ Also see "Sanofi Blocks Launch Of Dr. Reddy's Generic Allegra-D 24 Hour; 20 Suits Are Pending Over Other Formulations" - Pink Sheet, 21 June, 2010.).

"I would assume that Perrigo isn't buying a lawsuit here," said pharmaceutical patent attorney Richard Berman, a partner with Arent Fox in Washington. "That just wouldn't make business sense."

Opportunity Knocks

In a same-day research note, Chen says the acquisition from Teva represents good news for Perrigo, which would not have been ready to launch its own Allegra equivalent in early 2011. "Timing was the key factor" for Perrigo, she says.

In April, prior to the deal, CEO Joseph Papa said the firm was trying to anticipate appropriate OTC labeling for fexofenadine in its own ANDA and had hoped to be in the first wave of generic Allegra to hit shelves.

"We at Perrigo want to find ways to enter into the marketplace, and whether we do it ourselves or through a partnership, we think this would be something that would be a perfect opportunity for us, just based on the success we have had with the Zyrtec product," Papa said during Perrigo's third-quarter earnings call in April.

Chen downplays the threat of private-label Allegra competition from Dr. Reddy's and Mylan, both of which filed ANDAs. Mylan has no OTC marketing or distribution capacity and a preliminary injunction granted to Sanofi in June is holding up Dr. Reddy's filing with FDA.

Dr. Reddy's already manufactures and markets generic Allegra and has tentative FDA approval for an equivalent of Allegra D-12 Hour. The Indian firm's ANDA for generic Allegra D-24 Hour - which is excluded from the Perrigo-Teva deal - also has been approved, though its launch is currently delayed by the preliminary injunction, Dr. Reddy's said.

Even if OTC competition emerges to challenge Perrigo with additional generic versions of Allegra stock-keeping units, the firm's pedigree suggests it is a strong favorite to maintain market dominance.

During a June 29 analyst presentation, Papa reflected on how Perrigo succeeded with its Zyrtec equivalent despite the presence of six other ANDA filings for cetirizine in 2008.

Perrigo's "turnkey marketing solution," which provides "all the things that help this product to be successful in the marketplace for the retailer," has pushed the firm's product to about an 80 percent share of the store-brand cetirizine market, Papa said at the Oppenheimer & Co. Consumer, Gaming, Lodging and Leisure Conference in Boston (⁴ Also see "Perrigo Strives To Stand Out Against Incoming Private Label Competition" - Pink Sheet, 9 November, 2009.).

New Option In A Crowded Space

As a third-in-class OTC non-sedating antihistamine, the marketers of Allegra and equivalents have some old tricks available to help them gain share, said Laura Mahecha of Kline & Co.

"You'll certainly have the loyal following from the prescription side," said Mahecha, industry manager of the market research firm's Healthcare Practice.

"And I think to some extent in allergy there's always sort of switching among brands or ingredients if patients aren't satisfied or aren't receiving enough relief from their allergy symptoms."

Allegra marketers also may have success simply positioning the product as a new option, not necessarily more efficacious than existing products, Mahecha added.

Zyrtec tablets lead the branded cold/allergy/sinus remedy category with $223.4 million in sales during the 52 weeks ended June 13, according to SymphonyIRI Group data from supermarkets, drug stores and mass market retailers, excluding Walmart.

Sales of the main Zyrtec product dipped 2.8 percent compared to the prior year, while Claritin tablets increased sales 6.5 percent to $160.3 million over the same span, SymphonyIRI said.

- Dan Schiff ( ⁵ d.schiff@elsevier.com )

Perrigo Gains Pole Position In Private-Label Allegra Race

More from Archive

More from Pink Sheet