Wyeth generic Protonix launch ripples in industry

NEW YORK, Jan 30 (Reuters) - The impending widespread availability of low-cost U.S. generic versions of the blockbuster ulcer drug Protonix stands to be good news for generic drugmakers, pharmacy benefit managers and consumers -- mainly at the expense of Protonix's maker, Wyeth WYE.N.

Wyeth said late on Tuesday it was launching its own generic version of Protonix, even as it continues to try to stop other companies from selling their own generics.

Wyeth said it was introducing its version in response to a launch late last month of a generic by Teva Pharmaceutical Industries Ltd (TEVA.O)(TEVA.TA).

Teva had agreed to stop further shipments of its product under a so-called standstill agreement with Wyeth to give the companies time to assess a possible settlement of patent litigation between them.

Teva shares rose 1.5 percent in Tuesday trading on Nasdaq as analysts expected the Israel-based company to resume shares of its generic.

India's Sun Pharmaceutical Industries Ltd (SUN.BO) and U.S.-based partner Caraco Pharmaceutical Laboratories Ltd (CPD.A) have also started selling a generic. Shares of Sun, which also reported strong earnings, rose more than 6 percent and Caraco shares more than 3 percent.

Shares of U.S. pharmacy benefit managers Medco Health Solutions Inc (MHS.N) and Express Scripts Inc (ESRX.O) also rose 3 percent and 2 percent, respectively.

The arrival of generic drugs generally help Medco and Express Scripts, which administer benefits for employers and operate large mail-order facilities. They can leverage low prices from generic manufacturers.

Leerink Swann analysts described Wyeth's move to launch its generic as positive for Medco and Express, saying they were not able to capitalize on Teva's initial launch because of unfavorable pricing.

Meanwhile, shares of Wyeth were off 3.5 percent in afternoon trading at $39.61. Wyeth's move led Citigroup analyst George Grofik to cut his earnings projection for 2008 to $3.48 per share from $3.96.

Similarly, Morgan Stanley analyst Jami Rubin called the news disappointing and lowered her price target on Wyeth stock to $46 from $49.

Shares of AstraZeneca Plc (AZN.L) also fell 2.8 percent in London, as analysts girded for increased pressure on its rival ulcer drug, Nexium. (Reporting by Lewis Krauskopf, additional reporting by Ben Hirschler in London;, editing by Gerald E. McCormick)