Sun Pharma opts for out-of-court deals

Sun Pharma has joined the ranks of Indian pharmaceutical companies such as Ranbaxy, Dr Reddy's Labs and Lupin to go for out-of-court settlement with innovator drug majors in the US generics drug battle, following its agreement with Novartis to dismiss lawsuits related to a generic version of Exelon (rivastigmine tartrate) capsules for the treatment of Alzheimer's disease.

A few months ago, the USFDA had granted approval for Sun Pharma's abbreviated new drug application (ANDA) to market its generic Exelon for 1.5mg, 3mg, 4.5mg and 6mg drug potencies.

The yearly sales of Exelon capsules in the US market would be around $200 million in these strengths, according to estimates. Apart from Sun, believed to be the first to file ANDA for Exelon which entails a six-month exclusivity for the company in the US market, the US-based Watson Pharma and Indian firms Ranbaxy and Dr Reddy's had challenged the patent of Exelon. Watson Pharma also has announced to settle the dispute with Novartis for the same drug.

According to sector analysts, out-of-court settlements are common in the US generic battle as it could contain patent litigation costs and protect the interests of big pharmaceutical companies, when on the verge of losing the case.

Most of the deals allow the generic companies to launch authorised generics versions of the drug, with a royalty or co-marketing sales agreement with the innovator companies.

During the second week of November, New Delhi-based Ranbaxy had announced to settle its patent dispute with Astellas and Boehringer Ingelheim in the US courts over Flomax capsules, used in the treatment of benign prostatic hyperplasia (or enlargement of the prostrate glands).

The drug has sales of over $1.2 billion per annum. Under the agreement, Ranbaxy has been allowed to market the drug from March 2, 2010, eight weeks prior to expiration of the pediatric exclusivity of the drug.

In a similar deal, Ranbaxy had entered into an agreement with GlaxoSmithKline (GSK) in July to dismiss their US litigation with regard to Valtrex (valacyclovir hydrochloride tablets).

Valtrex, used for the treatment of herpes virus infection, has annual sales of over $1.3 billion. The deal will Ranbaxy to enter the US market in late 2009 as the first generic firm with a 180-day exclusivity.

Similarly, Mumbai-based Lupin and its US subsidiary Lupin Pharmaceuticals Inc have mutually settled a patent violation case pending in a US court on the bacterial infection drug Omnicef of Abbott Laboratories and Astellas Pharma.

Two months ago, the Belgian pharmaceutical company UCB had reached an out-of-court settlement with Dr Reddy's Laboratories and other patent challengers in the patent lawsuit for its anti-epilepsy drug Keppra in the US.

In October last year, Dr Reddy's also had settled the long-pending patent litigation with GlaxoSmithKline relating to sumatriptan succinate tablets, the generic version of GSK's Imitrex tablets, for migraine treatment.