Generic / Large Molecule

Patent Losses Put a Costly Damper on Merck's Cubist Buy

Source: Reuters

Dec 09, 2014

Just hours after Merck's $8.4 billion acquisition of Cubist Pharmaceuticals was announced, a federal court invalidated most of the patents protecting the Cubist's top-selling antibiotic, Cubicin.

The District Court of Delaware invalidated four Cubicin patents on Monday and ruled that Hospira can launch a generic version in June 2016, as opposed to the prior assumption of June 2018.

Cubist says it believes it will be able to successfully appeal the federal court ruling, and that process should conclude well before June 2016.

The drugmaker already has an agreement with another generic drugmaker, Teva Pharmaceutical, in which Teva can start selling a generic version of Cubicin in June 2018. Teva will buy its U.S. supplies of Cubicin from Cubist.

Merck said will proceed with its planned purchase of Cubist and still expects the deal to boost its long-term earnings.

Read the Reuters press release