Dr Reddy's Laboratories' share price on the National Stock Exchange plummeted by Rs 49 on Monday to close at Rs 989, following the news that the North Carolina-based AaiPharma Inc has sued generics firms which have launched fluoxetine generics in the US.
The US drug development firm has filed a lawsuit in Wilmington, US, against Dr Reddy's Laboratories and US-based Barr Laboratories alleging that these companies have infringed its patents on fluoxetine.
Fluoxetine is the active ingredient in Prozac and its generic versions. The main patent on fluoxetine, held by Eli Lilly through its Prozac brand, expired on August 2, 2001.
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Following the expiry, Dr Reddy's, Barr and one more company have launched different dosage forms of Fluoxetine under 180-day marketing exclusivity. Par Pharmaceutical Resources Inc is the marketing partner for Dr Reddy's in US.
AaiPharma Inc, which received two patents in July 2001 relating to some aspects of fluoxetine, now alleges patent infringement by Dr Reddy's and Barr.
Sales of fluoxetine played a major role in boosting Dr Reddy's second-quarter performance. Of the total generics sales of Rs 189 crore in the quarter, fluoxetine contribution was to the extent of Rs 164 crore ($35 million), thus contributing to the maximum extent of company's Rs 167 crore-operating profit from generics sales in the second quarter.
Reacting to the development, a senior executive of Dr Reddy's said: " It is not very significant. We believe patents filed by AaiPharma Inc on fluoxetine are invalid. We will file a counter suit in US court and we believe that we have a strong case."