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This article was first published 9 years ago  » Business » Ranbaxy loses exclusivity on heartburn drug in US

Ranbaxy loses exclusivity on heartburn drug in US

By Digbijay Mishra
January 28, 2015 14:43 IST
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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.”  

Business Standard had in October last year reported that the company might not be able to reap the benefits of the key 180-day exclusivity.  

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.  



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Digbijay Mishra
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