Close on the heels of the promoters selling 34.6% in Ranbaxy Laboratories for close to Rs 10,000 crore to Japanese pharma major Daiichi Sankyo, CEO & MD Malvinder Mohan Singh on Wednesday sprung another surprise by entering into an agreement with Pfizer Inc to settle most of their patent litigations worldwide involving atorvastatin (Lipitor), the world?s largest selling drug with worldwide sales of $12.7 billion in 2007.
The agreement, talks for which analysts believe predated the Daiichi Sankyo-Ranbaxy deal, could potentially earn the Indian pharma group $1.5 billion in worldwide sales. Analysts also say that given the fact that he drug enjoys exclusive sales in the US only until 2011 and that the company has already reaped the fruits of its blockbuster product, it makes sense for Pfizer to save on litigation costs by settling with Ranbaxy.
The deal also comes at a time when unconfirmed reports state that Pfizer Inc could be interested in acquiring up to 65% in Ranbaxy, primarily to gain from the Gurgaon-headquartered company?s successes in Lipitor litigation. Singh, however, has dismissed these claims.
The agreement on Lipitor, the world?s most-prescribed cholesterol-lowering medication, pertains solely to Ranbaxy and its affiliates and does not cover legal challenges to Lipitor involving other generic manufacturers. Under its terms, Ranbaxy will have a licence to sell generic versions of atorvastatin in the US, effective November 30, 2011, according to a Ranbaxy statement. Of the estimated $13 billion global market for Lipitor, the US alone constitutes $8.5 billion.
Commenting on the development, Singh said, ?This comprehensively settles outstanding issues between Ranbaxy and Pfizer, bringing to closure a number of ongoing patent disputes. It also provides certainty and visibility to the launch of Ranbaxy?s generic atorvastatin, with 180-day market exclusivity in the US and an early entry in other markets?. Ranbaxy plans to sell atorvastatin in Canada, Belgium, the Netherlands, Germany, Sweden, Italy and Australia.
Additionally, lawsuits between the two pertaining to atorvastatin will be dismissed in select countries, and lawsuits over the fixed-dose combination product containing atorvastatin and amlodipine will be dismissed in the US. Ranbaxy will no longer contest the validity of Pfizer?s patents in such countries. Patent challenges by Ranbaxy over Lipitor have been underway in several countries since 2003.