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Ranbaxy may still gain from Flomax

Ranbaxy may still gain from Flomax
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First Published: Thu, Mar 04 2010. 10 11 PM IST
Updated: Thu, Mar 04 2010. 10 11 PM IST
New Delhi: Ranbaxy Laboratories Ltd, India’s largest drug maker by revenue, failed to gain approval to launch the generic version of blockbuster urinary drug Flomax, but it may still get a one-time payment for enabling the launch of its generic version in the US market, according to an industry executive, who didn’t want to be named.
The company said in a statement that it wouldn’t be able to launch the product as it hadn’t obtained the requisite clearances on 2 March. On the same day, US-based generic manufacturer Impax Laboratories Inc. launched its version of Flomax in the US.
Ranbaxy added that its settlement (with Boehringer Ingelheim GmbH) “did enable the entry of an alternate generic that would benefit the consumers” as it got out of the way of Impax’s launch.
Prior to the settlement, Impax settled a patent litigation with Boehringer for the same drug in October 2009, allowing the company and Ranbaxy to launch the generic version on the same day.
“Impax had a para IV filing but was not first-to-file,” said Impact spokesman Mark Donohue in an emailed response.
According to an industry person closely involved with the settlement in October, Ranbaxy allowed Boehringer to bring in a third party (Impax) for launching generic Flomax. The person didn’t want to be named.
Analysts had previously estimated Ranbaxy’s revenue potential from the Flomax generic at $50 million. The drug has annual sales of $2 billion in the US, the world’s biggest pharmaceuticals market.
The Indian company declined to comment on the monetary benefit of the settlement with Boehringer Ingelheim.
“Ranbaxy will get a substantial part of the upside from Flomax sales in the US since it gave up its exclusivity on the product in favour of Impax,” said Hemant Bakhru, analyst with foreign brokerage CLSA. “But this deal may be between Ranbaxy and Boehringer or Astellas, and not between Ranbaxy and Impax.”
Ranbaxy had received first-to-file (FTF) status for marketing the generic version of Flomax in the US following a pact with Boehringer Ingelheim and Astellas Pharma Inc. in November 2007. Japan’s Astellas owns the patent, expiring 27 April, for Flomax and the drug is marketed by Boehringer Ingelheim in the US.
Under the terms of the settlement, Ranbaxy was to launch the drug in the US on 2 March with an exclusivity of eight weeks, following which other generic drug makers would also be able to launch their versions of the drug since the patent would expire by then.
A 3 March Citi Investment Research report also said Ranbaxy may yet benefit from the Flomax generic launch.
“We believe this could partially impair the valuation of its FTF pipeline, given that other FTFs may also face the same fate. However, the fact that Ranbaxy has other options to monetize its FTFs should come as a positive surprise to many as well,” wrote analysts Prashant Nair and Akshay Rai.
While Atul Sobti, managing director and chief executive officer of Ranbaxy, has maintained that the company is confident of monetizing its FTF pipeline, Ranbaxy has suffered delays and setbacks in launching products, except with the launch of generic Valtrex, a treatment for genital herpes.
This followed Ranbaxy being issued an import alert by the US Food and Drug Administration in September 2008 for two of its plants—Paonta Sahib in Himachal Pradesh and Dewas in Madhya Pradesh.
radhieka.p@livemint.com
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First Published: Thu, Mar 04 2010. 10 11 PM IST