AZ settles with generic challenger to Nexium
pharmafile | April 17, 2008 | News story | Sales and Marketing |Â Â Â
AstraZeneca has settled its legal battle with Indian generics company Ranbaxy Laboratories over the US patents on Nexium, AstraZeneca's biggest selling brand.
The agreement gives Ranbaxy rights to sell a generic version of the ulcer under licence from AstraZeneca from May 2014, a deal which both companies have claimed as a victory.
The news is a relief to AZ and its shareholders, since analysts had been concerned that the anti-ulcer pill, launched in Europe in 2000 and in 2001 in the US, could have lost its patent as early as this year. It earned the company $5.2 billion in 2007, and this guarantee of continued sales was warmly greeted in the markets, with AZ shares recording their biggest gain in six years, up 8%.
AstraZeneca's chief executive David Brennan said: "I believe that this agreement is the right business decision and gives increased clarity and stability to allow us to continue investing substantially in our growing pipeline of new medicines for patients. We continue to have confidence in the strength of our patents and will vigorously defend our intellectual property."
Ranbaxy shares also rose, with chief executive Malvinder Singh calling the agreement "extremely positive". But several manufacturers are lining up to produce generic versions of Nexium, and AZ still has cases pending against Teva/IVAX and Dr. Reddy's Laboratories. Patents protecting the brand are set to expire between 2014 and 2019.
In addition to all legal proceedings against Ranbaxy being dismissed, Ranbaxy will also provide some of AZ's US supply of Nexium from May 2010. The company is also to manufacture some esomeprazole magnesium, the active pharmaceutical ingredient in Nexium, from May 2009. Ranbaxy will also be US distributor for authorised generic versions of Plendil (felodipine) and 40mg Prilosec (omeprazole).
AstraZeneca had filed patent infringement litigation following Ranbaxy's submission to the FDA for a generic version of Nexium. Under the terms of the legal agreement, Ranbaxy concedes that all six patents asserted by AstraZeneca are valid and enforceable. Four of them would have been infringed by the unlicensed sale of the proposed generic.
