Private Label Competition For Zegerid OTC Sets Sail With Perrigo Launch

Perrigo Co. PLCis shipping the first generic equivalent of Bayer AG's Zegerid OTC proton pump inhibitor six years after filing an abbreviated new drug application and after two separate patent infringement litigations were settled.

The omeprazole/20mg and sodium bicarbonate/1,100mg capsules indicated for the treatment of frequent heartburn from the private-label giant will bear labeling that has been through several updates since the first PPI became available on a non-prescription basis in 2004. Labeling for Zegerid OTC and generic equivalents most recently was changed in June 2015.

Perrigo's announcement on July 18 that it is shipping to retailers and distributors its omeprazole/sodium bicarbonate capsules following FDA approval of its ANDA filed in 2010 leaves Nexium 24HR (esomeprazole/20mg) as the only branded OTC PPI still not facing private-label competition.

Perrigo and other OTC private-label suppliers already make private-label or store-brand versions of the nonprescription PPI pioneer, Prilosec OTC (omeprazole/20mg) marketed by Procter & Gamble Co., and of Prevacid 24HR (lansoprazole/15mg), marketed byGlaxoSmithKline Consumer Healthcare LP.

Perrigo executives have stated their interest and other private labelers likely also are interested in making OTC generics of Nexium 24HR, the latest PPI to launch following an OTC switch approval in 2014.

However, the product marketed by Pfizer Inc., under license from innovator AstraZeneca PLC, still has some time as the only OTC esomeprazole/20mg on the market. According to FDA's Orange Book, Nexium 24HR has market exclusivity through March 28, 2017, and has multiple patent protections related to drug substance or claim that extends through November 2019 at the latest.

Perrigo says sales of Zegerid OTC, marketed by Bayer Healthcare LLC, were $27m for the 12 months ending in June, down from around $70m in the brand's debut year. Still, sales of private-label and store-brand versions of the product would be a welcome boost for Perrigo's total revenues.

In a July 18 research note, Deutsche Bank Market Research analysts noted Perrigo has competition in the private-label space. They said while Perrigo's "position in the industry remains dominant with a roughly 70%-75% share of the categories in which it plays, the operating environment remains competitive-based with several smaller competitors and large consolidated buyers."

Perrigo's first-quarter total revenues rose 32% to $1.38bn but it reported a net loss of $133.1m, or 93 cents per share compared with a loss of $94.9m, 67 cents per share, in the year-ago quarter. In May, it also reported $467m in impairment charges related to the branded products segment, a European business it launched by acquiring companies and brands over the past two years .

Its announcement of shipping omeprazole and sodium bicarbonate capsules did not spur investors, as its share price was down 2.35% to $92.47 at the close of trading.

Patent Expiration July 15

The Dublin-based firm, with operations headquarters in Allegan, Mich., filed an ANDA in September 2010 for a generic equivalent of Zegerid OTC, prompting a patent infringement suit from the brand owner at that time, Merck & Co. Inc.'s Schering-Plough HealthCare Products business, in the US District Court of New Jersey. (Also see "Perrigo moves forward with generic Zegerid OTC" - Pink Sheet, 27 Sep, 2010.) Merck since has sold its consumer products business to Bayer.

Merck/Schering-Plough and Perrigo agreed to stay the case pending a ruling on a similar complaint against Par Pharmaceutical Inc. concerning a generic of Rx Zegerid, which is available in capsules and powder forms at 20mg and 40mg omeprazole doses. (Also see "Zegerid patents ruled invalid" - Pink Sheet, 19 Apr, 2010.)

Following a federal appellate court ruling in its favor in the Par litigation, Merck/Schering-Plough agreed with Perrigo to dismiss the OTC patent infringement claim and the firms reached a settlement in September 2012, according to New Jersey district court records.

The Merck/Par litigation concerning Rx Zegerid patents also was voluntarily dismissed after the firms reached an agreement in April 2014, according to court records.

According to FDA's Orange Book, both Perrigo and Par received tentative approval for making omeprazole/20mg and sodium bicarbonate/1,100mg products in 2012.

An industry stakeholder with knowledge of the Perrigo and Par ANDAs said the approvals were deemed tentative because the firms, in their separate litigation settlements, had agreed with Merck/Schering-Plough to wait for Zegerid patents expiry before launching the OTC products.

The expiry date for all Zegerid OTC patents was July 15, the date that the two firms, along with Actavis Group(now Allergan PLC ) received FDA approval for their ANDAs.

Par sold exclusive marketing rights for its OTC product to Westbury, NY.-based [PL Developments Inc.] in 2009, however, that agreement expired before Par's ANDA was approved (Also see "In Brief" - Pink Sheet, 11 Apr, 2011.). Neither of the other two companies has disclosed launch plans.

Bayer continues to market the only powder Zegerid OTC, 20mg omeprazole and 1,680mg sodium bicarbonate that is mixed with water for use.

Labeling Evolves

The Drug Facts Warnings area on labels for Perrigo's omeprazole/sodium bicarbonate capsules will include changes in labeling that FDA asked for in 2014 in response to a citizen petition by Public Citizen. The agency approved Bayer's supplemental NDA for the changes on Zegerid OTC labels in June 2015 (Also see "Zegerid OTC, Private Label Omeprazole Add Drug Interaction Warnings" - Pink Sheet, 16 Jun, 2015.).

Under the heading "Ask a doctor before you use if you are taking," the label will include "methotrexate arthritis medicine" as a bulleted statement and mycophenolate mofetil in addition to tacrolimus in the "immune systems medicine" statement for immunosuppressant drug inaction warning.

Also in June 2015, FDA approved sNDAs to add the methotrexate and mycophenolate mofetil warnings to Prilosec OTC and Prevacid 24HR labels in addition to labels for private label versions of those products.