Global health-care giant Fresenius Kabi won a big victory Dec. 18 when a federal court found Hospira Inc.'s patents on the short-term intravenous sedation drug Precedex were invalid.

Claims in Hospira’s U.S. Patent Nos. 9,616,049 and 8,648,106 covering dexmedetomidine premix formulation were obvious in light of prior art, Judge Rebecca R. Pallmeyer of the U.S. District Court for the Northern District of Illinois said in an opinion dated Dec. 17 but released late on Dec. 18. Obviousness is when an invention would have been apparent to someone experienced in the technology at the time.

The ruling may spell trouble for Hospira—now part of Pfizer Inc.—because it paves the way for Fresenius to enter the market with a generic version of Precedex much earlier than expected. The drug, which is used at hospitals and clinics, is estimated to have an annual market value of about $200 million in the U.S., according to IMS reports.

“A broad result of this win is that evergreening does not always work and should be reined in; more specifically, dexmed now can be generically sold 13 years before patent expiration,” Schiff Hardin LLP’s Imron Aly, the lead attorney for Fresenius Kabi on the case, said in a Dec. 19 statement.

Evergreening refers to a technique where companies seek an excessive number of patents on trivial improvements on a product to keep competition off the market.

Any launch by Fresenius—which has final Food and Drug Administration approval for the generic product—would be at risk because Pfizer could appeal the district court ruling. Generic drugs launch “at-risk” if they launch before patent litigation over the branded drug has been resolved.

A Pfizer spokeswoman told Bloomberg Law in an email, “We are disappointed by the decision and plan to appeal.”

Bloomberg Law contacted Fresenius for comment on the ruling and the potential for launch of a generic of Precedex, but no one was available to respond.

Pfizer, Fresenius Struggle

The ruling is a bright spot for Fresenius, which has been struggling of late. The German health-care company recently suffered a record plunge in profits after the company abandoned its financial goals through 2020. The company is grappling with challenges in all of its units, including its hospital division.

“We view 2019 as a transition year for the group as we invest in our businesses for further growth and to address regulatory challenges,” Chief Executive Officer Stephan Sturm said on a recent call with analysts.

Meanwhile, Pfizer has been dealing with its own problems in Hospira’s hospital-drug division ever since it paid $17 billion to take over Hospira in 2015.

Pfizer lowered its financial guidance for 2018 due in part to lower-than-anticipated revenues, primarily attributable to continued Hospira sterile injectable pharmaceutical product shortages in the U.S., the company said.

Shortages of hospital drugs like Precedex are intensifying.

Approximately thirty Hospira-made drugs were recalled from January 2017 to October of 2018 due to a range of issues including sterility and effectiveness problems, according to an FDA database.

Pfizer has said it would invest as much as $1.4 billion in the plants that make the drugs in order prevent future problems.

Jenner & Block LLP and Munck Wilson Mandala LLP represented Pfizer/Hospira.

Schiff Hardin LLP represented Fresenius.

The case is Hospira, Inc. v. Fresenius Kabi USA, LLC, N.D. Ill., 16 C 651, 12/17/18.