Mumbai: India’s No.2 drugmaker Dr Reddy’s Laboratories Ltd said on Monday a US district court has cleared the sale of its generic version of Sanofi-Aventis’ allergy medicine Allegra D24, sending its shares up nearly 4%.
The US district court of New Jersey lifted an injunction passed last June against the Indian drugmaker from selling a copycat version of the drug, Dr Reddy’s said in a statement.
“This is a positive for the company. Since Dr Reddy’s is the only player for this product, it should be able to do decent sales,” Sarabjit Kour Nangra, vice president of research and who tracks the sector at Angel Broking said.
Shares in the company, which dropped over 4% in the past four trading sessions on last week’s lower-than-expected quarterly results, rose as much as 3.7% early on Monday in a weak Mumbai market.
Last week, Dr Reddy’s said it had settled patent litigations with AstraZeneca on two drugs.
Bino Pathiparampil, vice president at IIFL Capital said he expects the product to add 4-5% to Dr Reddy’s per-share earnings in the next fiscal year ending March 2012.
Dr Reddy’s said in its statement on Monday the US court had also asked the plaintiffs -- Sanofi and Albany Molecular Research -- to post a security of $40 million towards the possibility the injunction had been wrongfully granted.
“Having been excluded from launching the generic product since the June 2010 hearing, Dr Reddy’s intends to pursue an award of this security,” the drugmaker said in the statement.
In 2009, Albany Molecular had sued the Indian generic maker alleging infringement of patents related to the manufacturing process of the drug.
Last week, Dr Reddy’s reported a swing in profit in the third quarter, but missed analysts estimates, hurt by poor sales at its German unit.
Global demand for cheaper generic drugs from drugmakers such as Dr Reddy’s and domestic rivals Ranbaxy Laboratories, Cipla Ltd and Sun Pharmaceutical Industries is booming as developed nations battle rising healthcare costs.