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| Sun Pharma stocks slip on US court decision |
| BS Reporter / Mumbai Apr 27, 2010, 00:51 IST |
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Share prices of drug major Sun Pharmaceutical Industries fell 4.77 per cent on the Bombay Stock Exchange (BSE) today, following two patent litigation setbacks in the US courts, last week.
Sun Pharma's share prices closed at Rs 1,604 per share at close of trading today, from Rs 1,684 at close of trading on Friday, last week.
In two separate patent cases, while a US court asked Sun Pharma to withdraw its version of a cancer drug, Eloxatin, from the US market, another jury, which examined patent validity of heart burn drug Protonix, ruled against the Indian company. This ruling may cause Sun Pharma to lose the patent litigation and the company may end up paying compensation for launching the drug at-risk, said analysts.
Sun Pharma is already facing trouble in the US, as its subsidiary, Caraco, was asked to stop production by the US drug regulator last year for not sorting out irregularities in manufacturing units.
The District Court of New Jersey on April 23 asked Sun Pharma to withdraw the generic version of Sanofi Aventis’ colon and colo-rectal cancer medicine Eloxatin (oxaliplatin) from the US markets by June end. Sun Pharma had launched its generic in the market in March. Patent experts said though the drug had sales of over $900 million in the US, upside for Sun Pharma was minimum as there were four-five players in the market.
A press release from Sanofi Aventis said Sun Pharmaceuticals would be required to cease selling its infringing generic version of Eloxatin from June 30, following the court order. The patent litigation settlements entered by companies such as Teva, Fresenius Kabi, Sandoz and Hospira warrant such a withdrawal between June 30 to August 9, 2012.
Both Sanofi and Sun Pharmaceutical were expecting a clarification from the US court to decide upon the date of withdrawal of generic Eloxatin.
In another development, Sun Pharmaceutical on Saturday said a jury returned a verdict in the patent litigation over generic Protonix (pantoprazole sodium) currently on in the US District Court for the District of New Jersey. The jury determined that innovator Nycomed (earlier Altana) and licence-holder Wyeth's US patent No 4,758,579 is valid.
A federal jury rejected arguments by Sun Pharmaceutical and Israel-based Teva Pharmaceutical Industries that the patent covered an obvious variation of earlier patented compounds in the same family as Protonix.
Pfizer, now the owner of Protonix through the acquisition of Wyeth, can now demand the US court to order Sun and Teva to stop selling the drug until the patent expires in January.
“Pfizer can also demand for damages as Sun Pharma launched the product at risk, if the court decides the patent is valid,” said Ranjit Kapadia, vice-president, institutional research, HDFC Securities.
Sun Pharma has earned about $225 million from the sale of this drug, estimated Ranjit Kapadia.
Protonix, to treat heart-burn or excessive stomach acid, had sales of over $820 million in 40mg and 20mg forms, he said.
The court is yet to give its final verdict on the patent litigation and Sun has the option of moving higher courts, said patent experts.
“We would prefer to wait for the court decision before outlining our options,” said a Sun Pharma spokesperson.
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