Another Headache for Pfizer: Generic Lipitor Threat from Canada

Last Thursday the Canadian Federal Court ruled against Pfizer, denying its application to block Ranbaxy Pharmaceuticals from producing a generic version of cholesterol-lowering Lipitor, the world's best-selling drug, based on a key ingredient which has a patent expiring in July 2010. Pfizer said it will appeal "... in an effort to sustain Lipitor's exclusivity through July 2010." Ranbaxy, an Indian generic drug maker, will still have to wait at least until May per the Court's ruling on another patent. AP reports Ranbaxy's spokesman said there will be another hearing in Feb. to decide on several other patent disputes. Pfizer suffered a major setback last month when it announced its hoped for Lipitor replacement torcetrapib would be halted due to higher risk of death for patients taking it than those that didn't. Lipitor accounted for 27% of Pfizer's global sales and 30% of its U.S. sales in 2006. Pfizer sells nearly 10x more Lipitor in the U.S., valued at $7.85b in '06, than in Canada.

• Sources: Press release, Forbes-AP, WSJ
• Related commentary: Pfizer's Not As Confident As It Seems, Pfizer Resorts to More Cost Cutting, Pfizer Beats Street Estimates; All Eyes on CEO Kindler's Cost Cutting Plans
• Potentially impacted stocks and ETFs: Pfizer (PFE). ETFs: iShares Dow Jones US Pharmaceuticals (IHE), iShares Dow Jones US Healthcare (IYH), Pharmaceutical HOLDRs (PPH), Vanguard Health Care (VHT), Health Care Select SPDR (XLV), First Trust Morningstar Dividend Leaders (FDL)

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