UPDATE 4-AstraZeneca’s Nexium target in EU antitrust probe

* EU suspects firms colluded to delay generic drugs

* AstraZeneca says visited by EU team over its Nexium drug

* Nycomed, maker of rival medicine, also inspected in probe

* Astra heartburn drug sold $5 billion worldwide in 2009

(Adds comment from lawyer, paragraph 4)

By Bate Felix and Ben Hirschler

BRUSSELS/LONDON, Dec 3 (BestGrowthStock) – AstraZeneca (AZN.L: ),
which makes the best-selling heartburn drug Nexium, has been
raided by EU antitrust regulators investigating suspected
collusion to block the sale of cheaper generic medicines.

Company officials said the $5 billion-a-year heartburn and
stomach ulcer drug was a key focus of the raids — the latest in
a series targeting improper activities in the sector.

The European Commission, which acts as the competition
watchdog of the 27-nation European Union, said on Friday its
investigators visited various company premises in several EU
countries on Nov. 30.

“It shows this issue isn’t going away,” said Lesley
Ainsworth, a partner at law firm Lovells. “We can anticipate
there will be more cases that the Commission pursues.”

The Commission produced a damning report on the sector last
year. It found delays in generic medicines reaching the market
were costing European consumers billions of euros.

U.S. antitrust regulators have also been looking critically
at settlement deals and other tactics used to delay generics.

The Commission did not name the companies involved, but
Anglo-Swedish AstraZeneca confirmed its premises had been raided
and the probe involved Nexium, also known generically as
esomeprazole.

Unlisted Swiss drugmaker Nycomed [NYCMD.UL], which makes a
rival drug called Pantozol, or pantoprazole, said two of its
sites in Germany had also been visited by EU officials.

Other major drugmakers — including GlaxoSmithKline (GSK.L: ),
Sanofi-Aventis (SASY.PA: ), Novartis (NOVN.VX: ), Roche (ROG.VX: ),
Bayer (BAYGn.DE: ), Pfizer (PFE.N: ), Merck (MRK.N: ), Bristol-Myers
Squibb (BMY.N: ), Abbott (ABT.N: ), Johnson & Johnson (JNJ.N: ), Novo
Nordisk (NOVOb.CO: ) and Lundbeck (LUN.CO: ) — said they were not
affected.

French privately owned drugmaker Servier, which has been
involved in previous EU investigations, also said it was not
included in the latest raids.

“The Commission has reason to believe that the companies
concerned may have acted individually or jointly, notably to
delay generic entry for a particular medicine,” it said in a
statement.

The inspections were a preliminary step in suspected
anti-competitive practices, it added.

“If confirmed, this could be a potential violation of EU
antitrust rules that prohibit restrictive business practices,”
the Commission said.

TARGETED BEFORE

For AstraZeneca, the investigation into Nexium marks the
latest brush with competition authorities in Brussels, who have
targeted the company before.

In 2005, the Commission ruled AstraZeneca had breached EU
rules by blocking or delaying market access to generic versions
of another anti-ulcer drug called Losec, the predecessor to
Nexium, between 1993 and 2000.

The company was fined 60 million euros ($79.1 million) in
the Losec case, although this was reduced to 52.5 million.

“I can confirm that we have been the subject of inspections
and that we are co-operating with the authorities,” an
AstraZeneca spokeswoman said, adding the inspections related “to
alleged practices regarding Nexium in Europe”.

The patent protection on Nexium has expired in a number of
EU countries but generic competition so far has been limited.
Several generic drugmakers launched cheap copies of Nexium in
Germany two months ago, and AstraZeneca said in October a
generic had gone on sale in Spain.

Nexium was AstraZeneca’s biggest-selling drug in 2009, with
global sales of $5 billion, although its importance is
declining. It was eclipsed this year by cholesterol fighter
Crestor, which is now AstraZeneca’s most important product.

The European Commission said in October that it planned to
review drug patent settlements struck by pharmaceutical firms to
delay cheaper generics going to market, as part of its crackdown
on illegal deals in the sector. [ID:nLDE69J2BC]

It later started probes into Servier and several firms that
make generic drugs and raided several drugmakers, including
Sanofi-Aventis, Novartis and generic drugmaker Teva
Pharmaceutical Industries (TEVA.TA: ).

In January this year, the EU watchdog sought details of
deals between originator and generic pharmaceutical companies
from July 2008 to December 2009. Its report showed there were
fewer anti-competitive agreements.

(Additional reporting by Foo Yun Chee, with Kate Kelland in
London, Katie Reid in Zurich, Lewis Krauskopf in New York, and
Noelle Mennella in Paris; Editing by Matthew Jones and David
Hulmes)

($1=.7582 Euro)

UPDATE 4-AstraZeneca’s Nexium target in EU antitrust probe