India’s leading drug maker Ranbaxy Laboratories Ltd on Thursday reached an out-of-court settlement with Japan’s Astellas Pharma Inc. and German drug maker Boehringer Ingelheim GmbH to drop its patent challenge over prostate drug Flomax.
The settlement could help Ranbaxy earn $200-250 million (Rs786-982 crore) in revenues in 2010, experts said.
Astellas had invented the drug while Boehringer has the licence for the US. In return, Ranbaxy will exclusively get the right to sell non-patented copies of tamsulosin—sold under the brand Flomax—for two months, starting 2 March 2010. This will give the company a lead of two months before the drug goes off patent.
Ranbaxy’s shares closed on Thursday at Rs430.90 on the Bombay Stock Exchange, up 0.87% in a bearish market that ended the day with a loss of 1.2%.
According to a sector analyst, who did not wish to be named, the drug was growing at 15-20% annually and its sales could be worth $1.6 billion in 2010. With marginal price erosion—Ranbaxy and Astellas/Boehringer would be the only players in the market—even a two-month market exclusivity could give $200-250 million in revenues.
The Indian drug maker benefits from predictable and assured revenues in the future without incurring litigation expenses or fighting for a market share with an authorized generic player. Astellas and Boehringer, by sharing two months of revenues, would be able to ward off the threat of a copycat version of Flomax until 2010, added the analyst.
A Ranbaxy release said it had received tentative approval for marketing tamsulosin drug from the US drug regulator on 20 June this year.
Ranbaxy chief executive Malvinder M. Singh said the settlement had brought about “certainty on the launch of the drug with an exclusivity before patent expiry”.