Labopharm partner loses tramadol patent appeal

The U.S. Court of Appeals for the Federal Circuit has ruled that Purdue Pharma Products’ patent claims for controlled-release tramadol, a pain medication, are invalid.  Purdue distributes Labopharm’s (TSX:DDS; NASDAQ:DDSS) tramadol drug Ryzolt in the U.S.

Generic drug maker Par Pharmaceutical (NYSE:PRX) had argued that the patent claims should be deemed invalid because they were an obvious, or easy to devise, improvement of existing knowledge.

Purdue, Napp Pharmaceutical and J&J’s Ortho-McNeil unit filed suit against Par in 2007 to block Par’s plans to bring out a generic version of 100- and 200-mg tramadol.  Last November, Par received FDA approval to market the copycat version.

The appeal court ruling prompted Versant Partner analyst Doug Loe to downgrade Labopharm to “neutral” from “buy,” cutting his price target to $1.25 from $2.50.  The stock was quoted at $1.18, down 2 cents, on Thursday afternoon.

“Labopharm’s U.S. Ryzolt sales have been disappointing to date and not expected to grow appreciably without a revised pricing/marketing strategy to compete with low-cost generic alternatives,” Mr. Loe said in a new report.