Ranbaxy sees major gains in Lipitor win

Ranbaxy Laboratories Ltd seems to have had a windfall in its Lipitor litigation against Pfizer, even as the US Court of Appeals for Federal Circuit has dished out a mixed verdict.

The launch of the drug by Ranbaxy would be advanced by a year to 2010 and, more importantly, the Delhi-based generic pharma player stands to gain in the six months' exclusivity period that would ensue.

Ranbaxy has won the fringe patent covering the calcium salt of Atorvastatin "� the generic version of cholesterol drug Lipitor, which clocked $8.5 billion US sales last year, patent for which would have expired in June 2011.

However, it has been found infringing on the main patent covering Atorvastatin, thereby lending patent protection to the innovator till March 2010. In December last year, the Delaware District Court had ruled against Ranbaxy in both the patents.

Commenting on the gains to Ranbaxy, Malvinder M Singh, chairman and managing director, said, "The launch has been advanced to 2010 and we would have a 180-day exclusivity on the world's largest molecule. It bears testimony to the robust research and development skills of Ranbaxy." He declined to specify the litigation spend on Atorvastatin.

The global patent litigation on Atorvastatin, the world's largest prescription drug with yearly sales of $12 billion worldwide, was one of the most keenly watched fights and had become representative of the conflict between the innovator companies versus the generic players.

Analysts claim that the Lipitor market can be worth $10-$11 billion roughly by 2010 at innovator prices.

Even if one were to factor in a 60 per cent price erosion in the first six months and the presence of an authorised generic and the innovator, Ranbaxy may still end up mopping a $1-$1.5 billion.

"Ranbaxy can earn over $1 billion in the first 15 months of launch, of which 70 per cent would be from exclusivity period. It is a windfall but in the stock market, investors don't really factor in revenues that would come four years down the line", said Abhimanyu Kalra, analyst, Batliwala & Karani Securities Pvt India Ltd.

But it may not be the end of the road for this battle. Pfizer may take recourse to rehearing before a full bench of Court of Appeals or even rewrite the patent in a reissue procedure before the US Patent Office, explained a patent expert.

"The decision turned on a technical defect in the (fringe) patent. There is a process for correcting such defects in the US Patent and Trademark Office and Pfizer plans to pursue that option," said Peter Richardson, Pfizer's senior vice president, associate general counsel and chief of intellectual property. 

Clarification

Ranbaxy has clarified that its launch of Lipitor, a cholestrol controlling drug, can earn it over $1 billion in the first year and not $1 million, as wrongly mentioned in a report published in Business Standard on Friday (Ranbaxy sees major gains in Lipitor win). Also, the launch of the drug has been advanced by fifteen months to March 2010 and Lipitor's US sales last year clocked $8.5 billion and not $8.5 million as wrongly mentioned. A statement from the company also clarifies that Ranbaxy may end up mopping $1 billion to $1.5 billion from the launch of this drug. The errors are regretted.