- Mylan launched the first generic version of United Therapeutics' Adcirca on Monday, beginning its 180-day exclusivity period as the first generic to market, Mylan said in a statement.
- Adcirca was a longtime driver of revenue and profit for United, which has been anticipating generic entry for months. The drug's compound patent expired last November, and a six-month extension from the court expired earlier this year, opening Adcirca up for competition.
- The drug was already showing diminishing returns for United due to increased royalty payments from a new licensing deal that went into effect last December.
Adcirca (tadalafil) hit the market in 2009 as a treatment of pulmonary arterial hypertension. While it was developed by Eli Lilly, United acquired the U.S. commercial rights in 2008. The first of three patents expired in November.
Adcirca is one of a handful of products United sells. While it was a decent profit-maker for United in its prime, returns fell significantly this year since a restructured licensing agreement with Lilly kicked in starting Dec. 1, 2017, boosting royalty payments. Sales peaked in 2016 at $372.2 million in net sales and $350.8 million in gross profit.
The new deal sent royalty payments from 5% to an effective rate of 42.5% when considering increased milestone payments as well, according to Securities and Exchange Commission filings.
Profits were already decreasing before generic entry too. Now that Adcirca is fully over the patent cliff, those numbers are expected to continue to drop as the competition typically brings downward pressure on pricing.
For the second quarter of 2018, United posted net sales of $109.8 million for Adcirca, down roughly 8% from last year. In that same time range, cost of product sales ballooned from $6.7 million to $47.5 million. The company said 97% of the cost increase came from royalty payment increases from the new licensing deal.
For Mylan, the new approval and subsequent market exclusivity come as welcome news compared to recent developments with its epinephrine auto-injector EpiPen and its business in general.
Last week, Mylan's board of directors formed a strategic review committee to assess options for its suffering North American unit. While international sales grew 10% year over year during the first six months of 2018, revenue from North America dropped 20% in that same time period.
"Mylan has a strong history of leading the way in creating important access to generic medicines, and we're excited to continue that tradition by offering the first generic to Adcirca tablets," Mylan CEO Heather Bresch said in a statement.