UPDATE 1-Merck signs deal for Fosamax authorized generic

Fri Jan 11, 2008 12:20pm EST

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NEW YORK Jan 11 (Reuters) - Merck & Co (MRK.N) said on Friday it had signed a deal for an authorized generic form of its blockbuster Fosamax osteoporosis drug, to become available after the U.S. patent on the world's top-selling osteoporosis drug lapses on Feb. 6.

"We can confirm an authorized generic deal for Fosamax has been signed, although specific details of the deal are proprietary," said Merck spokesman Ron Rogers. Fosamax has global annual sales of about $3 billion.

An authorized generic is a copycat form of a company's branded medicine that is sold through a licensing agreement, usually with a generic-drug manufacturer. Such deals allow the original seller of a branded drug to hold on to a greater revenue stream from the medicine once it loses patent protection and becomes prey to competition from generics.

An authorized generic can significantly hurt sales of rival generics waiting to be launched once a branded drug's patent lapses.

According to Merck, Israeli drugmaker Teva Pharmaceutical Industries TEVA.O and Barr Pharmaceuticals Inc BRL.N have signaled they expect to win approval in 2008 for their generic forms of Fosamax. Typically, the first generic-drug maker to seek approval of a generic form of a branded medicine is entitled to 180 days of marketing exclusivity in the United States, assuming its product is approved. But an authorized generic upsets that lucrative scenario.

Shares of Barr were down 47 cents to $54.59 in midday trading on the New York Stock Exchange. Teva shares rose 2.43 percent to $48.56 on the Nasdaq. Neither of the companies returned calls seeking comment.

Merck shares were up 68 cents to $61.15 on the NYSE.

(Reporting by Ransdell Pierson; editing by John Wallace)

((Reuters Messaging: ransdell.pierson.reuters.com@reuters.net; 646-223-6034; ransdell.pierson@reuters.com)) Keywords: MERCK/

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