Sanofi-Aventis, Bristol offer to settle Plavix issue with DRL

Mumbai, March 22 | Updated: Mar 23 2006, 05:42am hrs
The stock of Dr Reddys Laboratories Ltd surged to a new high on Wednesday after Sanofi and Bristol-Myers offered to settle a Plavix patent dispute and analysts said they expected the Indian firm to take up the offer.

Sanofi-Aventis and Bristol-Myers Squibb Co announced, on Tuesday, that they had settled a dispute with generic rival Apotex Inc that could keep US patent protection on its multi-billion-dollar blood thinner Plavix until 2011 and had approached Dr Reddys for a similar settlement.

Dr Reddys officials were not available for comment.

Dr Reddys shares rose 11.4% to a record high of Rs 1,513 on the news and closed the day at Rs 1,489.35 in a weak Mumbai market. Dr Reddys and Canada-based Apotex have been challenging the Plavix patent since 2002, hoping to sell cheaper generic versions of the drug in the United States before the patent runs out. It would be a good thing for Dr Reddys to go into an agreement as litigation matters take a long time, IDBI Capital Markets analyst Shahina Mukadam said.

Dr Reddys has been through a rough patch in the past four years, with no big drug launches to fill the gap left by the expiry of its exclusive rights to sell Eli Lilly & Cos blockbuster Prozac anti-depressant in the fiscal year ended 2002.

Drug Deal
Sanofi and Bristol-Myers offered to settle a Plavix patent dispute and analysts expect Dr Reddys to take up the offer
Dr Reddys and Canada-based Apotex have been challenging the Plavix patent since 2002
Dr Reddys has been through a rough patch in the past four years, with no big drug launches to fill the gap left by Prozac
Dr Reddys had earlier challenged Mercks patent on Proscar
But the company has said that it expects to do better next fiscal year as it introduces several new drugs. It has plans to launch seven or eight drugs in the US and four or five in Europe by March 2007. It also entered cost-sharing deals with venture capitalists last year in a bid to reduce its high research and development costs.

Sarabjit Kour Nangra, an analyst with Angel Broking, said the stock rose on expectation of a possible settlement.

Given Dr Reddys recent track record, the expectation is they will do it, she said, referring to the deal Dr Reddys struck with Merck & Co in February.

Dr Reddys had, in February, agreed with Merck to sell generic versions of the American companys prostrate drug Proscar and cholesterol drug Zocor after patent expiry. The Indian company had earlier challenged Mercks patent on Proscar, she said.

Reuters