Before the lower court barred them, Ranbaxy and Teva sold the generic version of the drug, which had $665 million sales in 2004, from December 2004 to March 2005. The greater danger for Ranbaxy, however, is the level of punitive damages that could be levied on the generics maker after Pfizer said that it would go to court seeking compensation for loss of sale and profits of Accupril for the period Ranbaxy sold the drug as a generic.
According to the terms of its agreement with Teva, which relinquished its six-month marketing exclusivity, Ranbaxy would fully indemnify Teva for all patent infringement claims relating to Ranbaxy's Quinapril tablets. Fearing punitive damages, the markets reacted violently against the judgment, hammering the Ranbaxy scrip 2.9%. Ranbaxy, which has seen a bottomline dent for the past four quarters is the worst performer in the Sensex, declining by over 40% since January.
The patent for the key ingredient quinapril hydrochloride expires in August 2007 and an infringement suit is pending against the Ranbaxy and Teva. Incidentally, Pfizer has not filed any suit against Mylan and Par Pharma, two other generic makers who have got marketing approval for quinapril. On Tuesday, AstraZeneca filed a suit against Ranbaxy to prevent it from launching a copy of its best seller Nexium. After winning permission to sell a GlaxoSmithKline's Ceftin in 2002, Ranbaxy hasn't won a patent case since then. It insists that its strategic direction remained unchanged and told investors and analysts recently that it had 19 such first to file products pending approval in the US.