Ranbaxy gets tentative FDA nod for ulcer drug

Ranbaxy gets tentative FDA nod for ulcer drug
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First Published: Fri, Feb 08 2008. 11 58 AM IST
Updated: Fri, Feb 08 2008. 11 58 AM IST
New Delhi: India’s biggest drug maker by revenues, Ranbaxy Laboratories Ltd, received tentative regulatory approval to introduce a version of a patented heartburn and anti-ulcer drug, which grossed some $5.5 billion (Rs21,725 crore) revenues for its owner AstraZeneca Plc.
Ranbaxy could get market exclusivity for a limited period for the drug, with potential sales estimated at up to $825 million.
Esomeprazole magnesium, the chemical name of Nexim, the AstraZeneca medication, is the second largest selling drug in the US. It is protected by a series of patents, which expire at various times between 2014 and 2019.
Ranbaxy’s efforts to introduce a generic version of the drug are currently under litigation.
These factors, put together, will ensure that the revenues from sales of a generic version of the drug will not accrue to Ranbaxy in the near future, said sector analysts.
Indeed, shares of the company fell 2.53% to Rs373.65 each on the Bombay Stock Exchange on Thursday, on a day the bourse’s benchmark index, the Sensex, fell by 3.38%.
“It is difficult to time the launch of the drug as the litigation process is still in the lower court,” said a pharmaceutical industry analyst with Kotak Securities Ltd. The analyst, who declined to be identified, estimated that the drug could give revenues of $750 million and profits of $500 million, if it was launched.
Another analyst with another Mumbai-based equity firm said that though it was a “big opportunity”, it was “still a far off one”. Ranbaxy would need final approval from the US Food and Drug Administration, get past the litigation, and be the only player in the exclusivity period to earn big, added the analyst.
A Ranbaxy spokesperson declined comment on a possible launch date, or if the company was willing to risk launching the drug when it received the final nod from FDA without a court verdict in its favour.
AstraZeneca had sued Ranbaxy in the US in 2005 for infringing on its Nexim patent.
A statement by Ranbaxy said it “believed that it has an FTF (first-to-file) status on the drug, providing it with a potential 180 days marketing exclusivity”.
It could not be immediately ascertained if there is any other FTF player who could share Ranbaxy’s spoils in the six-month limited exclusivity period such drug launches are normally eligible for.
Two of the three analysts Mint interviewed said an out-of-court settlement was a strong possibility.
Ben Hirschler and Rina Chandran of Reuters contributed to this story.
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First Published: Fri, Feb 08 2008. 11 58 AM IST