US court restrains Dr Reddy's from selling generic Nexium

The temporary restraining order was issued after AstraZeneca objected to the use of purple colour

In a set back to Dr Reddy's Laboratories (DRL), the District Court of Delaware, USA, has granted a temporary restraining order on the sale of its generic heart-burn product esomeprazole.

The order was issued as a result of motion moved by the pharmaceutical major Astra Zeneca, which owns the esomeprazole brand Nexium, objecting to the usage of the colour purple in the said generic product.

DRL had got the approval from the US Food and Drug Administration (US FDA) for sale of this product only on September 25, after a long wait. The Nexium delayed-release capsules brand and its generics had US sales of $5.2 billion for the 12-month period ended July.
 

THE CONTROVERSIAL DRUG

• The order was issued after a motion by Astra Zeneca, which owns the esomeprazole brand Nexium, objecting to the usage of the colour purple in the said generic product
   
• DRL had got the approval from the US Food and Drug Administration for sale of this product only on September 25
   
• Currently Teva, Mylan and Camber Pharmaceuticals sell the esomeprazole generic versions in the US market

During the recently announced second quarter results, the company clarified that the upside in its US revenues during the quarter came without the revenues of the block buster Nexium as it was launched only towards the last week of September. The company had expected revenue of $50 million from this product on an annualised basis.

"The company is complying with the order of the Court and simultaneously evaluating all possible options to resolve the matter at the earliest," said Dr Reddy's management in a filing sent to the BSE on Tuesday.

According to the filing, the court order has been passed pending further hearing or trial. The court has asked the parties to propose a next course of action and submit the same to the court. The court is expected to conduct a telephone status conference on November 12.

Currently Teva, Mylan and Camber Pharmaceuticals have been selling the esomeprazole generic versions in the US market. The company’s share fell 4.8 per cent to Rs 3,336.3 on Tuesday, lower by 168.30 over the previous day's close of Rs 3,504.6.

This was the third consecutive session of steep fall in DLR’s share price since Friday. following a warning letter issued to the firm on three of its manufacturing plants.

After a 15 per cent fall on Friday the company scrip faced a five per cent decline in each of the next two trading sessions. The shares touched a 52-week high of Rs 4,382.95 just about 20 days ago on October 20.