Profiting from Drug Patent Expirations
About Drug Patents
Drug patents grant biotechnology and pharmaceutical companies the exclusive right to sell covered drug for a period of 20 years from the date of patent filing. Because patents must be applied for before the start of the clinical trial process that demonstrates drugs to be safe and effective, the effective life of drug patents tends to be 7-12 years.
When Drug Patents Expire
Once drug patents and other forms of market exclusivity expire, generic companies are free to develop and market generic forms of previously patented drugs. Pioneer drugs can lose up to 70% of their market share overnight with the entry of generic drugs.
Profiting from Drug Patent Expirations
Knowing when drug patents expire can help predict when share prices will fall. If a blockbuster drug, one with over a billion dollars in annual sales, is due to expire, then the company selling that drug is likely to see a sharp decrease in revenue, and a resulting drop in stock price.
Betting on Generics
Identifying companies that have successfuly produced generic form of high profile drugs can help investors pick companies poised for growth. As drug patents expire, these generic manufacturers are likely to successfuly produce generic drugs and cannibalize the market share of industry leaders.
Competitive Intelligence
Comprehensive drug patent expiration information is scarce on the
Internet. DrugPatentWatch
specializes in
collecting raw data on drug patent and exclusivity expirations data directly from the FDA reformatting it in to reveal information.
