Allergan Loses Bid to Block Drug Rival

With an extraordinary amount of angst, a federal appeals court Friday ruled that Allergan Inc. of Irvine cannot block generic versions of its glaucoma drug, Alphagan.

The ruling by the three-judge panel in Washington, D.C., brings cheaper knockoffs from Alcon Laboratories Inc. and Bausch & Lomb Inc. a step closer to market. The Food and Drug Administration must approve the generics before they can be sold.

However, Allergan could appeal the decision, a step that would further delay generics from competing in the company’s $250 million-a-year glaucoma drug business. UBS Warburg analyst C.J. Sylvester said generic competition could shave $40 million from Allergan’s sales.

Alcon, a Swiss eye-care company, said it was pleased by the ruling. A representative of Bausch & Lomb of Rochester, N.Y., could not be reached.

Allergan had no comment on the court decision. But the company’s outside counsel, Donald R. Dunner, strongly hinted that Allergan would ask the full court to rehear the patent case. “The fat lady hasn’t sung yet,” he said.

The case is unusual in that Allergan does not have a patent on brimonidine, the active ingredient in Alphagan, or its approved use as a treatment to relieve pressure on the optic nerve -- an accepted cause of glaucoma when Alphagan was approved in 1996.

Allergan has two patents on the use of brimonidine to prevent degenerative disease of the optic nerve -- another possible cause of glaucoma that is gaining acceptance in the medical community. But this use of brimonidine is not approved by the FDA.

In its suit Allergan argued that its rivals planned to sell the generics as off-label glaucoma treatments in violation of its patents. The U.S. District Court threw out Allergan’s case before it could come to trial and the Appeals Court upheld that decision, albeit reluctantly.

The three judges said Allergan should be allowed to offer evidence that its rivals intend to violate its patents. But the judges said their hands were tied by a recent precedent-setting decision in a similar case involving Pfizer Inc. and generic drug maker Apotex.

A separate three-judge appellate panel ruled in January that Pfizer couldn’t use patents on off-label uses of an epilepsy drug to block Apotex from selling generic copies of it.

Allergan moved last year to protect itself from generic competition with the launch of Alphagan P, a diluted version of the original drug.

The company has converted 98% of prescriptions to the new product and discontinued Alphagan.

Allergan had sales of $1.4 billion last year and is best known for its Botox wrinkle treatment. Its shares fell 85 cents to $69.19 on the New York Stock Exchange.