New Delhi: Ranbaxy Laboratories Ltd, whose share price has been roiled by its troubles with the US drug regulator, suffered a further blow, with Canadian generic or off-patent drug maker Apotex Inc. questioning in court the company’s ability to launch two generic drugs on schedule.
In two separate filings in the US district court of North Carolina, Apotex has pointed to Ranbaxy’s troubles with the US Food and Drug Administration (FDA) and said that these may prevent the Indian firm from launching two big products—generics versions of herpes drug Valtrex and Alzheimer’s drug Aricept—and thereby hurt the business of other generic companies, including the Canadian firm’s.
That’s because firms that get first permission to launch generic versions of drugs also get a so-called marketing exclusivity period during which no other generic company will be allowed to launch its version. Ranbaxy has a 180-day exclusivity for one of the two drugs and while this time is usually calculated from the date of launch of the generic version, the company’s troubles with FDA could mean a significant delay in the launch. Ranbaxy is also first in line to launch the other drug in question.
If Apotex wins the cases, Ranbaxy’s 180-day exclusivity period for the first drug will begin immediately, regardless of whether or not it has permission from FDA to market the drug. And it will also lose its position at the head of the queue to launch the other drug.
Following the settlement with GlaxoSmithKline Plc. (GSK) in 2007, Ranbaxy won a 180-day marketing exclusivity for the herpes drug and said it expected to launch this by the end of 2009. Apotex cannot launch its own generic version till this period expires, said the Canadian firm’s filing. It added that it believes that FDA’s action against Ranbaxy would “prevent it from commercially marketing a generic valacyclovir (the name of the active ingredient in Valtrex) product for an indefinite period of time in the future.” The com pany’s filing also claimed that Ranbaxy makes valacyclovir at its Dewas facility, which is under FDA’s scanner.
On 16 September 2008, FDA had issued warning letters to Ranbaxy’s manufacturing plants at Paonta Sahib in Himachal Pradesh and Dewas in Madhya Pradesh.
Valtrex has annual sales of $1.3 billion (Rs6,360 crore). According to analysts, Ranbaxy was expected to make $150-200 million from the launch of its generic version of Valtrex.
Apotex didn’t respond to emailed queries although Mint has copies of the two court filings made on 1 and 7 July. Ranbaxy’s spokesperson declined comment.
“This risk that exclusivity could be triggered early is not limited to the two products in question, but also applies to other products such as Nexium and Lipitor where other companies have applied for declaratory judgements (against the patent holders). Apotex is trying to trigger Ranbaxy’s exclusivity early and pave the way for its own launch (for the products). We believe the risk is lower for filings from Dewas than those from Paonta because of the AIP invoked on the latter,” said Prashant Nair, analyst with Citi Investment Research.
AIP refers to the application integrity policy that FDA invoked on a company or a manufacturing plant of a company and simply means that the regulator will halt the review of all pending and new applications filed from that plant.
In April, during a conference call with analysts after the announcements of its results for the first quarter of 2009 (Ranbaxy follows the calendar), Malvinder Mohan Singh, then CEO and managing director of the firm had told analysts that Ranbaxy would be able to launch Valtrex this year. “There is a clear possibility it (Valtrex) can be launched,” he had said.
Singh resigned from the company in 24 May.
Earlier, in June 2008, Singh and his family had sold their entire 34.8% stake in Ranbaxy to Japan’s Daiichi Sankyo Co. Ltd. At that time, it had been announced that Singh would stay on at the company till 2013.
Last year, Ranbaxy failed to launch the generic version of GSK’s Imitrex for which it had a 180-day exclusivity. It’s loss was Dr Reddy’s Laboratories Ltd’s gain. The firm launched its authorized generic version of the drug in November and admitted in March that this was behind its higher gross profit margins.
In the case of Aricept, Apotex’s filing said that “a reasonable opportunity for further investigation and discovery will show Ranbaxy’s tentative approval has been revoked because Ranbaxy failed to comply or conform with accepted regulatory (GMP, or good manufacturing practices) and legal requirements relating to its generic drug products and ANDA (abbreviated new drug application) submissions.”
“Ranbaxy will not be able to enter the market for generic donepezil hydrochloride (the active ingredient of Aricept) on November 25, 2010 without final approval... Generic entry will be delayed indefinitely if Ranbaxy does not launch on November 25, 2010,” the filing adds.
Shares of Ranbaxy closed 2% down at Rs248.20 each on the Bombay Stock Exchange on a day when Sensex fell 2.8% to close at 13,769.15.