Bausch wins US appeal to block Alvogen generic of diarrhea drug

A U.S. appeals court on Thursday affirmed a decision for Bausch Health BHC that barred rival drugmaker Alvogen from marketing a proposed generic version of Bausch's diarrhea treatment Xifaxan until 2029.

A Delaware federal court had determined that Alvogen subsidiary Norwich Pharmaceuticals' generic would infringe patents owned by Bausch's Salix Pharmaceuticals. It blocked the U.S. Food and Drug Administration from approving the generic until the last Xifaxan U.S. patent expires in October 2029.

Representatives for Bausch and Alvogen did not immediately respond to requests for comment on the decision.

Bausch has said the litigation could affect its plans to spin off its eye-care business Bausch + Lomb. Analysts at Jefferies said on Thursday that the decision removes a "key barrier" for the spinoff.

Bausch has separately agreed to allow Xifaxan generics from Teva Pharmaceuticals TEVA, Sun Pharmaceuticals SUNPHARMA and Sandoz SDZ starting in 2028 after settling related patent disputes.

Xifaxan is approved to treat traveler's diarrhea and irritable bowel syndrome (IBS) and can be used to prevent the liver-related brain disorder hepatic encephalopathy (HE).

Salix sued Norwich for patent infringement over its proposed generic in 2020. A Delaware federal judge determined in 2022 that the generic would infringe three Salix patents related to treating HE while declaring other Salix patents invalid.

Norwich asked the U.S. Court of Appeals for the Federal Circuit to reverse the district court's decision to block its generic based on the infringement, while Salix appealed the decision to invalidate its other patents.

The FDA tentatively approved Norwich's generic last year but declined to grant its final approval because of the Delaware court order.

Norwich has also appealed a loss in a separate lawsuit in Washington, D.C. federal court, where it sought to force the FDA to fully approve its drug.