Ranbaxy settles US patent case out of court

In a first out-of-court settlement of a patent infringement dispute involving an Indian pharmaceutical company, Ranbaxy Laboratories has signed an agreement in the US with Cephalon Inc.

Cephalon will grant Ranbaxy a non-exclusive royalty-bearing right to sell a generic version of psychostimulant Provigil (Modafinil) tablets in the US.

This comes on the heels of a US district court striking down Ranbaxy's challenge to Pfizer's patent on Lipitor, an anti-cholesterol drug that generates $12 billion a year.

Ranbaxy's licence will become effective in October 2011 in the absence of a pediatric extension for Provigil, which will delay the entry date by six months.

"An earlier entry by Ranbaxy may occur on the basis of the entry of another generic version of Provigil," said a statement issued by Ranbaxy today.

The two companies have agreed to a series of business arrangements related to Modafinil.

Ranbaxy has agreed to grant Cephalon an immediate non-exclusive licence to some of its worldwide intellectual property rights related to Modafinil in exchange for milestone payments.

Cephalon has agreed to have an arrangement with Ranbaxy on the supply of the active pharmaceutical ingredient, Modafinil.

The two parties will file for dismissal of the case in the district court of New Jersey. The out-of-court settlement is subject to the approval of the US Federal Trade Commission.