Merck & Co's cholesterol-reducing drug Vytorin faces competition for the first time ever after two companies announced progress on their generic versions of a drug that generated more than $1 billion in sales last year.
The U.S. Food and Drug Administration on Wednesday approved Impax Laboratories Inc's generic version of Vytorin, while Teva Pharmaceutical Industries Ltd launched its generic version of the drug in the United States.
Impax said it will immediately start commercialization for its generic version of Vytorin.
Vytorin is a combination product that includes the drugs ezetimibe and simvastatin, sold under the brand names Zocor and Zetia. Zocor lost patent protection in 2006 and Zetia, which generated 2016 sales of $2.6 billion, lost patent protection on Tuesday.
In general, revenue from branded products falls by 90 percent once multiple generics hit the market. Vytorin currently costs about $300 for a supply of 30 tablets.
Merck faces generic competition this year not only to Vytorin and Zetia, but also to its antibiotic Cubicin and its Nasonex nasal spray in the United States and for its arthritis drug Remicade in Europe.
The company is betting it will ultimately offset those losses with other drugs, including its cancer drug Keytruda, which is approved for certain patients with non-small cell lung cancer and melanoma and is being tested in a range of other cancers as well.
Merck in February issued a 2017 profit forecast that was in line with Wall Street expectations.
Impax shares gained 2.8 percent to $14.40 in trading after the bell on Wednesday. Teva and Merck shares were little changed.
(Reporting by Toni Clarke in Washington and Divya Grover in Bengaluru; Editing by Savio D'Souza)