Pill power

Mumbai, May 2: A US district court has ruled in favour of Ranbaxy Laboratories Ltd’s first-to-file claim on cholesterol lowering drug simvastatin, paving the way for the company to market the generic version of Merck’s blockbuster anti-cholesterol drug Zocor.

Dr Reddy’s also stands to gain if generic makers are allowed exclusive marketing rights for the generic version of Zocor. It had entered into an authorised generic agreement with Merck early this year, which allows it to sell the drug if a 180-day exclusivity is granted to generic companies.

Both the companies will now be able to sell the drug equivalent to Zocor, which has sales of over $4 billion.

The duo will be able to market this drug during a 180-day exclusive period. A marketing exclusivity is granted to pharmaceutical companies who make first applications with the US Food and Drug Administration for generic versions ahead of the patent expiry of a particular drug.

Other players can enter the market only after this exclusive period expires. As competition increases after this period, prices of the drug and revenues take a beating.

Sources close to Ranbaxy said the company will launch simvastatin after it gets the final nod from the US FDA.

Last Friday, a US judge ruled as “unlawful” a decision by the US FDA to discard the claims made by Ranbaxy and Teva Pharmaceuticals of Israel seeking six months exclusivity to sell Zocor when the patent expires in June 23. Zocor is the world’s second largest selling anti-cholesterol drug after Pfizer Inc’s Lipitor.

Ivax Pharmaceuticals, which was acquired by Teva, had made the first application to market the generic version of Zocor (simvastatin) in three dosages (10, 20 and 40 mg), while Ranbaxy wanted to market one dosage of the drug.

While Merck’s revenues from the drug is expected to go down by half following the entry of Ranbaxy and Teva in the market, analysts estimated that Ranbaxy could rake in at least $80 million from the generic sales of Zocor.

The news of the court ruling boosted Ranbaxy and Dr Reddy’s shares on the bourses today.

Ranbaxy, which opened at Rs 504, shot up to an intra-day high of Rs 530 and closed at Rs 522, a gain of Rs 49.45, or 10.46 per cent, over its previous close of Rs 472.55.

Dr Reddy’s gained Rs 250.10, or 17.47 per cent, on the BSE today with the scrip closing at Rs 1,681.95. It had opened at Rs 1,450 and hit an intra-day high of Rs 1,699.95.

The sharp gains in both these counters led the BSE healthcare index move up 3.95 per cent, or 153.76 points, to end at 4048.60.