Overview of Novartis' patent losses from GlobalData

Swiss drug major Novartis (NOVN: VX) is the latest victim of patent protection loss, note analysts at industry expert GlobalData. On October 7, 2012, the company’s chief executive, Joe Jimenez, reportedly stated that the company had witnessed a "significant" slump in US sales of Diovan (valsartan) – its hypertension, heart failure and myocardial infarction drug – since the product's patent expired at the end of September.

Furthermore, Mr Jimenez said Novartis expected the resulting drop in overall revenue to last into the first half of 2013, consequently setting the company up for the three unpleasant and “very challenging quarters” ahead. Sales of generic versions of Diovan, which lost patent protection in Europe at the end of last year, have already resulted in a $2 billion drop in demand for the drug, which was prescribed more than 12 million times in the USA in 2005 alone and achieved global sales of about $6.1 billion in 2010. However, Mr Jimenez is optimistic that the drug would still generate annual sales of about $5.6 billion.

Like many pharmaceutical companies who have relied on the blockbuster model of drug discovery and development, these are not the best of times for Novartis, which is seeing many of its branded drugs lose patent protection. In 2011, the company lost market exclusivity for Femara (letrozole), its oral non-steroidal aromatase inhibitor for the treatment of hormonally-responsive breast cancer. Generic versions of the drug, which generated $1.4 billion in revenues in 2010, have already been launched in the USA and major European markets by generic competitors. As a result, revenue from Femara reduced by 35.7% to about $900m in 2011.