Ranbaxy, Novartis unit Geneva Generics and Israels Teva Pharmaceutical Industries had sued to invalidate GlaxoSmithKline patents so that they could launch generic copies of the blockbuster antibiotic. Ranbaxy shares soared, closing up 9.7 per cent at Rs 839.10 on overnight news a US judge had ruled in favour of the generic companies.
Augmentin is a key drug for GlaxoSmithKline, with global sales of $2 billion, including $1.3 billion in the United States and the British company said it will appeal the ruling. "We are getting our drug ready, but were taking very seriously GSKs view that they have a strong case," Ranbaxys president Brian Tempest said from New Delhi. He said Ranbaxy was still awaiting approval from the US Food and Drug Administration (FDA) for its generic copy.
Geneva Generics already has a final FDA approval. Ranbaxy said in March it was confident of launching its copy by December 2002, but Tempest declined to commit to a date. "This was an anticipated event but its not as simple as people think," he said, referring to the court ruling.
SG Asia analyst Jesal Shah said he expected Ranbaxy to earn $23 million in net profit from generic Augmentin in 2003, assuming it is launched around July next year. Ranbaxy has performed strongly in the United States in recent quarters, with January-March US sales, at $51 million, overtaking domestic sales of $40 million. Tempest said Ranbaxy expected to record sales of $200 million in the United States in 2002 even without generic Augmentin.