BackSun Pharma to shell out `2,517 cr to settle patent suit
The payment is a part of a settlement agreement with Wyeth and Takeda GmbH
Premium(Hemant Mishra/Mint)
Mumbai: Sun Pharmaceutical Industries Ltd has said it will pay its dues of ₹ 2,517.41 crore soon as part of a settlement agreement with Wyeth (now a division of Pfizer Inc.) and Altana Pharma AG (now known as Takeda GmbH). “We have a made a provision of ₹ 2,517.41 crore payable in terms of the settlement agreement and the amount will be paid soon," Sun Pharma managing director Dilip Shanghvi said during a conference call.
During the June quarter, Sun Pharma settled the ongoing litigation pending in the US district court, district of New Jersey regarding its subsidiary’s generic pantoprazole. Under the terms of the litigation settlement between Sun Pharma, Wyeth and Altana Pharma AG, the parties have dismissed all their claims.
Sun Pharma will pay a lump-sum $550 million as a part of this settlement. The company had already provided ₹ 584 crore in second quarter of FY13 towards this liability. For the quarter ended 30 June, the company made a provision of ₹ 2,517 crore towards the difference between total settlement amount and past provision. The company reported net loss at ₹ 1,276 crore in June quarter, on account of a provision of ₹ 2,517 crore towards settlement for patent infringement litigation.
“All our businesses continue to perform in-line with our expectations. We remain focused on strengthening our existing businesses and developing a differentiated and speciality driven product basket,: Shanghvi said.
“We also continue to review opportunities to expand and strengthen our global footprint," he added.
The company has continued its leadership in branded generics-chronic therapy in the country. Sales of branded prescription formulations in India grew by 44% at ₹ 849 crore in first quarter of FY14.
Sun Pharma holds 5.1% market share in the ₹ 72,000 crore Indian pharmaceutical market. The company reported strong performance led by Sun portfolio in the US formulations market.
Sales in the US were at $364 million for the quarter, up by 28%, accounting for 58% of total sales. The company has made consolidated R&D expense of ₹ 205 crore, at 6 per cent of sales in first quarter of FY14. Its total number of patent applications submitted now stands at 791, with 503 patents granted so far.
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