atc patent expiry in 2013

I reckon one of the key reasons why ATC was rejected by every HIV player was its limited patent life in the US. The US patent is currently due to expire in 2013. In the highly unlikely event that AVX manage to pull a rabbit out of the hat and raise the funds/find a partner to complete phase III and file a NDA before 2013, then the FDA will probably grant an extension for the time it took shire to get their IND + the time it takes AVX to get their NDA. At most, this will give AVX another 3 years. There is also a potential additional 6 month extension for a pediatric indication, but AVX have conducted no pediatric trials so will not be eligible for this.

AVX also have a patent over one aspect of the manufacturing process, but history shows that generic companies have little trouble getting around simple crystal structure molecules like ATC. In other words, any savvy pharmaceutical player will know that any generic company could manufacture ATC if it wanted to.

So even if we assume a best case scenario, that AVX magically raise or find a partner to fund another phase III and file a NDA before the 2013 deadline, at most, the company will have barely 3 years of composition of matter protection. Since it typically takes 4-5 years to reach peak sales, the return on the $75mill+ it would take to fund phase III, market and launch ATC into the salvage therapy market in the US would be virtually nil. And even if we were to be extremely generous (i.e. unrealistic) with out assumptions and add another couple of years to the 3 year extension, it barely changes this equation.

If the independent reviewer concludes that ATC is commercially viable without properly explaining why US patent expiry isn't a problem, you can bet the reviewer is not independent at all, but is merely taking a healthy consultancy fee in exchange for telling management what they want to hear.

Arguably, the single most important contribution a CZD representative could have made to the current AVX board would have been to ensure that the independent review process is in fact a genuinely independent process conducted by a suitably qualified person. To the best of my knowledge, the current person who has been chosen to conduct the independent review has no particular expertise in HIV drugs.