Actavis Ordered By Court To Keep Selling Immediate-release Alzheimer's Drug

(RTTNews) - Generic drug maker Actavis plc (ACT) said that a U.S. district court has ruled that the company is required to continue distribution of the immediate-release version of its Alzheimer's drug Namenda.

The announcement marks a setback to Actavis and a win for New York Attorney General Eric Schneiderman, who had filed an antitrust lawsuit against the company in September 2014.

According to Actavis, Judge Robert Sweet of the U.S. District Court for the Southern District of New York announced an intent to issue a preliminary injunction that requires Actavis to continue distribution of Namenda, or memantine Hcl, immediate-release tablets.

The court has set a hearing for Monday, December 15 on the scope of the injunction. However, Actavis said it will immediately appeal the decision.

Brent Saunders, CEO and President of Actavis said, "We are disappointed by today's unprecedented ruling. However, we are prepared to manage our business in a way that provides the least disruption in our ability to support the marketplace and minimize any financial impact on our Company."

Actavis said it believes that the ruling will have no impact on its ability to continue focusing its resources on transitioning patients to the "more convenient and innovative" once-daily Namenda XR, or extended-release version.

Namenda XR extended release capsules are a higher dose, once-daily formulation of Namenda immediate release, indicated for the treatment of moderate to severe dementia of the Alzheimer's type. Its mechanism of action focuses on the glutamate pathway, a target for the treatment of Alzheimer's disease.

Actavis said it plans to continue strong promotional efforts and further expand demand with the launch of a direct-to-consumer advertising campaign on January 5, which will highlight the significant benefits of Namenda XR for patients and caregivers.

In addition, the company noted that a fixed-dose combination of Nameda XR and donepezil is currently under review at the U.S. Food and Drug Administration, with anticipated approval by the end of this year.

New York Attorney General Schneiderman filed an antitrust lawsuit in mid-September 2014, saying he was seeking to prevent Actavis and its New-York based subsidiary Forest Laboratories from forcing Alzheimer's patients to switch medications as part of an anti-competitive strategy designed to maintain high drug prices.

The lawsuit alleged that Actavis planned to force Alzheimer's patients to change medications in order to eliminate competition and protect profits.

Schneiderman had noted that Namenda is protected by a patent that will expire next year and Actavis will thus face competition from generic drug makers after patent expiry.

Schneiderman said at that time in a statement, "Instead of facing that competition, Actavis plans to force patients to switch unnecessarily to a very similar drug with a longer patent. Once patients switch to the new drug, Namenda XR, it's likely that they will remain on that medication even after the Namenda generics hit the market due to the practical difficulties of switching back, thus allowing Actavis to insulate its profits from competition."

ACT closed Thursday's regular trading at $263.00, up $4.19 or 1.62 percent on a volume of 2.73 million shares. However, in after-hours, the stock declined $2.58 or 0.98 percent to $260.42.