Efforts by pharmaceutical firm Elan to force through the controversial sale of two drugs to US company King were boosted yesterday after the threat of generic competition to one of the products was partially removed.
Eon Labs, one of the companies competing to produce a generic version of muscle relaxant Skelaxin said a study comparing its version with the original had been deemed unacceptable by US regulator the Food and Drug Administration (FDA).
The FDA's decision not to accept the study is likely to force Eon to embark on clinical trials of the generic drug, thus delaying its release. The regulator made its move after Elan filed a citizen's petition to require generics to undergo more stringent tests.
New York-based Eon said it would continue its effort to bring the generic drug to market.
Elan's agreement to sell Skelaxin and sleep drug Sonata to King for $850 million (€798 million) ran into difficulties earlier this month after the US Federal Trade Commission (FTC) said it was investigating the possibility that the Irish firm had unfairly blocked competition to Skelaxin.
Elan has taken legal action to compel Tennessee-based King to complete the acquisition. The Irish firm declined to comment yesterday. Merrion Stockbrokers analyst Mr Peter Frawley said that while the FTC investigation would continue to weigh on the sale, the news from Eon was "slightly positive".
Mr Frawley suggested that the FDA's move added "credence" to Elan's position on competition because it came in response to the firm's petition.
If the agency acted in the same way on further generic threats to Skelaxin, it would leave King with a "degree of exclusivity" on the drug, according to Mr Frawley.
Meanwhile, Elan has made a further small step in its recovery programme with the establishment of a pre-clinical alliance with German pharmaceutical firm Ingenium.
The companies will jointly spend $10 million over four years on research into pain management.
The alliance forms part of Elan's strategy to prioritise pain treatments for future growth. "Through this investment and other planned investments in our core business, we are addressing the future growth component of Elan's recovery plan," said Elan chief executive, Mr Kelly Martin, in a statement.
Shares in Elan bucked the trend in Dublin yesterday by closing 15 cents higher at €2.80.
In New York, where the stock is mainly traded, shares closed down 19 cents at $2.80.
