Ivax May Lose Its Right to Sell Generic Taxol

Ivax Corp. may lose its right to sell a generic form of Bristol-Myers Squibb Co.’s Taxol cancer drug after an appeals court Tuesday said the Food and Drug Administration erred in approving the generic.

Ivax shares plunged as much as 11% and Bristol-Myers shares rose.

A third drug maker, American BioScience Inc., holds a patent on Taxol, and successfully argued to the Circuit Court of Appeals for the District of Columbia that the FDA improperly approved the generic. American BioScience contended that its patent was listed in the FDA’s registry of valid patents when the FDA approved the generic.

Closely held American BioScience owns American Pharmaceutical Partners Inc., which filed in October for a first-time stock sale.

The Los Angeles-based company expects to obtain an exclusive North American license for the generic version of Taxol from Bristol-Myers.

Ivax won approval to sell the drug in September 2000, after a years-long patent battle with Bristol-Myers and a last-minute challenge from American BioScience.

The ruling is the second in a month in which a generic approval was overturned, and the issue goes back to the FDA for a determination on whether it can order Ivax to pull the generic version of Taxol off the market.

The FDA’s approval of the generic version was “arbitrary and capricious and must be vacated,” ruled the U.S. Circuit Court of Appeals for the District of Columbia. “We frankly do not know what recourse is left to the FDA or other government agencies to take any steps that would affect the marketing of the generic version of Taxol.”

American BioScience lawyer Joseph F. Coyne said he believes the trial court will order the FDA to force the removal of Ivax’s generic drug from pharmacy shelves.

FDA officials said they are reviewing the opinion and wouldn’t comment further.

Ivax said it doesn’t believe the court’s decision will prevent the company from marketing its generic drug.

Ivax said it will ask the court to reconsider the ruling.

Shares of Miami-based Ivax fell $2.15, or 11%, to $17 on the American Stock Exchange before trading was halted at midday.

Bristol-Myers shares rose $2.49, or 4.7%, to close at $55.76, on the New York Stock Exchange.

Taxol had sales of more than $1.5 billion last year.

The appeals court said the FDA should not have approved Ivax’s generic version after American BioScience received a patent that claimed to have a process that let patients receive higher doses of Taxol with fewer side effects.