Cadila Healthcare Ltd and Zydus Pharmaceuticals (USA) Inc have entered into an in-principle agreement with Warner Chilcott to settle all outstanding patent litigation related to bowel disorder drug Asacol.

Warner Chilcott had lodged a suit in the Delaware federal court, US, in 2011, seeking to stop Cadila and its US unit from launching a generic version of the drug.

Warner Chilcott is a Puerto Rico-based pharmaceutical company. It had filed the suit in response to the filing of an abbreviated new drug application (ANDA) by Cadila and Zydus that sought to market a generic version of the drug before the expiration of Warner’s patent.

Under the terms of the agreement settled out of court this month, Warner would grant Ahmedabad-based Cadila and Zydus a royalty-bearing licence to market a generic version of Asacol beginning November 15, 2015 or earlier under certain circumstances, after Zydus got final approval from the US regulator for its ANDA.

Alternatively, if Zydus does not receive the US Food and Drug Administration’s approval by July 1, 2016, the drug-maker will be allowed to launch an authorised generic version of Asacol on July 1, 2016. Other terms of the settlement were not disclosed.

Speaking about the settlement, Sarabjit Kour Nangra, Vice-President-Research at Angel Broking, said: “Asacol HD had sales of $122 million (around Rs 756 crore today) during the quarter ended June 30.”