Drug maker Ranbaxy’s troubles with the US Food and Drug Administration (FDA) continue, with the American regulator allowing Israel-based Teva Pharma to launch the generic of Nexium, a heartburn medicine from the AstraZeneca stable.
Nexium makes about $4 billion in global sales. Ranbaxy’s loss, meanwhile, could be gain for drug major Cipla, which provides Teva Pharma formulations for Nexium generic.
Teva’s benefit from an early entry into one of the biggest drug opportunities will have a rub-off on the Mumbai-based Cipla.
Ranbaxy had late last year sued US FDA in a federal court after the regulator stripped it of its 180-day exclusivity on Nexium. An exclusivity on the drug could have added over $170 million to Ranbaxy’s kitty.
FDA has said Teva’s subsidiary, Ivax Pharmaceuticals, can sell the Nexium generic in 20-mg and 40-mg capsules. The drug had gone off-patent in May last year.
Following the regulator’s move, Ranbaxy said: “Ranbaxy is disappointed with the result and is pursuing all available legal options to preserve its rights.”
After the FDA move, the company’s shares dropped marginally from their previous close on BSE to end at Rs 706.90 apiece on Tuesday.
Cipla’s shares, on the other hand, soared about 4.62 per cent over their previous close to end at Rs 705.95 apiece.
Online stock trading firm Angel Broking said: “The development is negative for the company but we retain our neutral rating on the stock, since we have not factored it in our projections.”
On Cipla supplying to Teva, Angel Broking’s Sarabjit Kaur Nangra said: “Cipla will benefit and this will fully reflect in 2015-16… we retain our neutral rating on the stock.”
At present, all domestic plants of the Gurgaon-based Ranbaxy are barred from selling in the US, the biggest drug market in the world.
This has led to substantial losses for the company, which is in the process of being acquired by the Dilip Shanghvi-controlled Sun Pharma.
Dr Reddy’s, Sun Pharma and Aurobindo Pharma have also filed abbreviated new drug applications to market the generic version of Nexium in the US market.
Following a patent litigation, AstraZeneca and Ranbaxy had agreed for a settlement on the generic launch of the drug in 2008.
According to estimates, Nexium was the second-best-selling drug for AstraZeneca.
Ranbaxy has been going through a rough patch for some time now.
The company had last year agreed to settle litigation related to its participation in Texas Medicaid, the US federal-state health care programme focused on people with low incomes.
The settlement deal was worth about $40 million.
In May 2013, the company had paid a penalty of $500 million to the US Department of Justice, after pleading guilty to felony charges related to drug safety and misrepresenting data to gain quicker approvals.
NO END TO AILMENTS
2006
US FDA issues warning letter to Ranbaxy’s Paonta Sahib facility in Himachal Prades
2007
A whistleblower lawsuit alleges the firm defrauded federal programmes
2008
Daiichi Sankyo acquires majority stake in Ranbaxy
US FDA imposes import alert on Ranbaxy’s Paonta Sahib & Dewas factories; bans 30 drugs
2013
May
Criminal charges filed against Ranbaxy in the US. Company agrees to pay a fine of $500 million
September
US bans imports from Ranbaxy’s factory in Mohali
2014
January
US FDA bans imports from Ranbaxy’s main active pharmaceutical ingredient factory in Toansa
Sun Pharmaceutical announces it will acquire Ranbaxy in a $3.2-billion deal
US administrative subpoena issued to Ranbaxy’s Toansa factory
October
Ranbaxy agrees to pay $40 million in a case related to Texas Medicaid
November
Ranbaxy sues US FDA in federal court of America over revoking 6-month Nexium exclusivity
2015
January
FDA gives nod to Teva for Nexium generic; Ranbaxy loses exclusivity
Indian pharma cos well positioned for global growth: S&P
US generics benefit from pharma see-saw
Big Pharma still betting on 'messed up' Indian drugs market
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