The Hindu Business Line : Ranbaxy settles patent suit with Cephalon for sleep-disorder drug

RANBAXY Laboratories Ltd has entered into a patent litigation settlement with the US-based Cephalon Inc whereby it will not launch the generic version of the sleep-disorder drug, Provigil (modafinil), until at least 2011.

However, if any other company that is fighting a patent litigation for Provigil wins, Ranbaxy would be able to enter the market early. Still pending is Cephalon's suit against Mylan Laboratories Inc and Barr Laboratories Inc. Those companies want to begin selling a version of the drug after the main compound patent expires in 2007. Cephalon has entered into a similar agreement with Teva Pharmaceuticals.

According to the settlement, Cephalon will grant Ranbaxy a non-exclusive royalty-bearing right to market and sell a generic version of Provigil in the US.

Ranbaxy's licence will become effective in October 2011. But, if the drug is approved for paediatric use, the entry could be delayed by another six months to April 2012. Provigil accounted for $364.5 million, or 44 per cent of Cephalon's sales in the first nine months of the year.

Besides this, the two companies have also entered into a series of agreements whereby Ranbaxy will share certain worldwide intellectual property rights related to modafinil in exchange for milestone payments. Cephalon will also enter into arrangements with Ranbaxy related to supply of the active pharmaceutical ingredient modafinil.

Mr Malavinder Mohan Singh, President, Pharmaceuticals, Ranbaxy, told Business Line, "We believe that the settlement has been pro-generic. Also looking at the realities of the litigation, we decided not to pursue the litigation. If any other company is able to launch the drug early, we will also be able to enter the market then."

He was, however, not willing to divulge the financial implications of the settlement.