Companies

Ranbaxy shares drop 7% on Lipitor hurdle

Our Bureau New Delhi | Updated on March 22, 2011

bl22_new_ranbaxy.eps

Ranbaxy Laboratories' share price tumbled nearly 7 per cent on Monday after US based pharmaceutical company Mylan Inc. sued the US Food and Drug Administration, seeking to block the Indian drug maker's exclusive rights to sell a generic version of blockbuster anti-cholesterol drug Lipitor.

Mylan, in a complaint filed on March 18 in a federal court in Washington, said it and other generic-drug makers should be allowed to enter the market as soon as Lipitor's patent expires later this year.

It contended that Ranbaxy isn't eligible for marketing exclusivity because of false and unreliable data from its manufacturing site in Paonta Sahib, from where copies of Lipitor would be produced.

Ranbaxy's shares fell the most in two years on the Bombay Stock Exchange on concerns that Mylan's move may hamper its plan to start selling the medicine in the world's largest drug market in November. Ranbaxy fell 6.96 per cent to Rs 435.95 at close on Monday. The company, 64 per cent owned by Japan's Daiichi Sankyo, did not comment on the development.

Lipitor is Pfizer's product and is world's largest selling drug with global sales of over $10 billion last year. In 2008 Ranbaxy had reached an agreement with Pfizer to sell generic version of the drug in the US market beginning November 30, 2011.

Ranbaxy had said it is entitled to 180 days of marketing exclusivity as a reward for agreeing to withdraw all litigation contesting the validity of Pfizer's patents in specified countries, including the US. The Indian company had said that it expected to earn revenues of over $1.5 billion starting 2011 from this product.

But Mylan wants the court to force the FDA to say publicly whether Ranbaxy's application was tainted and therefore the 180-day exclusivity void. If the court rules in favour of Mylan then it would be able to enter the market 11 months earlier than expected.

Ranbaxy, on the other hand, will not only lose the exclusivity period but also undo the gains it was hoping to get from the 2008 deal with Pfizer. That will be a blow to Ranbaxy in the US market where it is already fighting a ban on 30 drugs imposed by the USFDA.

Published on March 21, 2011

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like