In a significant development, Ranbaxy Laboratories has entered into a series of out-of-court settlements with AstraZeneca, covering patent disputes as well as manufacturing and distribution arrangements for Nexium, the worldâ€™s second-largest selling drug. Ranbaxy estimates a revenue upside of $1.25-1.5 billion from these settlements.
The Indian company will now be able to market generic versions of AstraZenecaâ€™s acidity drug, Nexium, from May 2014 with a 180-day marketing exclusivity. Ranbaxy will also manufacture â€œa significant portionâ€ of Nexium for AstraZeneca from May 2010 and its active pharmaceutical ingredient (API), esomeprazole magnesium, from May 2009. Nexium is the worldâ€™s second-largest selling drug behind Pfizerâ€™s Lipitor with annual sales of $5.5 million and growing at 8-10% annually in the US market alone.
â€œThis is the biggest settlement in the pharmaceutical space, and the company expects revenues of $1.25-1.5 billion from the settlements between 2008 and 2014. We are pleased with the agreement, which will provide certainty to the launch of a generic formulation of esomeprazole magnesium in the US market,â€ Ranbaxy CEO & MD Malvinder Singh said.
While Ranbaxy has not specified the annual break-up of the settlement, it is expected that a significant portion of the settlement revenue will come in from 2014 during the 180-day exclusivity period.
A Mumbai-based pharma analyst said Teva has also filed applications to sell generic copies of Nexium but has not received US FDA approval.
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