Dr Reddy’s Labs shares turn positive as Aloxi patent ruling concerns fade

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Published: February 16, 2017 1:45:43 PM

A favourable ruling could have given Dr Reddy's an opportunity to launch a version of the Aloxi drug in the US market but it would not have allowed it to automatically replace the the original patented drug. (Image: Reuters)

A favourable ruling could have given Dr Reddy's an opportunity to launch the drug in the US market but it would not have allowed it to automatically replace the the original patented drug. (Image: Reuters)A favourable ruling could have given Dr Reddy’s an opportunity to launch the drug in the US market but it would not have allowed it to automatically replace the the original patented drug. (Image: Reuters)

Dr Reddy’s Laboratories shares recovered losses and were trading mildly positive after the concerns waned on hopes that the potential loss to the company would not be as much as was initially feared on account of the unfavourable ruling by a US court regarding a patent infringement case over anti-nausea injection Aloxi.

Dr Reddy’s shares went up as much as 0.8% to the day’s high of Rs 2,932.4 in the afternoon trade, after falling 3.66% to the day’s low of Rs 2,803.5 earlier.

Earlier today, Dr Reddy’s had said in a notice to the BSE that it had received an unfavourable patent ruling in a US court over the planned launched of its Aloxi drug. “The United States District Court for the District of New Jersey issued its opinion regarding Helsinn Healthcare’s patent infringement claims against Dr Reddy’s proposed palonosetron product,” it had said, adding, “The court found that Dr Reddy’s proposed palonosetron hydrochloride 0.25 mg/5 ml infringes on certain claims of US patents… and that the asserted claims were not valid.”

Helsinn Healthcare SA is a Switzerland-based pharma company.

The size of the Aloxi drug is estimated to be at $750-800 million globally, and at around $600-650 million in the US alone. Dr Reddy’s had filed application for the release of a modified version of the drug under the rule 505(B)(2), meaning that a favourable ruling could have given it an opportunity to launch the drug in the US market.

However, it also means that the Dr Reddy’s would have automatically replaced the original patented drug from the market, Surajit Pal, a Pharmaceutical sector analyst with the research and brokerage firm Prabhudas Lilladher told CNBC TV18. Dr Reddy’s would have had to do their own branding and promotion to sell the drug and convince the customers and channel partners to buy it, Pal said to CNBC TV18.

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Dr Reddy’s had expressed its displeasure over the ruling upholding the original innovator’s patent claims. “We are disappointed in the decision and intend to pursue an appeal in due course,” a company spokesperson said.

Aloxi injection is used in adults to help prevent nausea and vomiting due to chemotherapy.

 

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