Glenmark Pharma settles patent dispute with GSK

Glenmark Pharmaceuticals has entered into an out-of-court settlement with the world's second- largest drug maker, GlaxoSmithKline (GSK), over the launch of a generic version of anti-malarial drug brand Malarone.

Its US subsidiary, Glenmark Generics Inc, settled the litigation pending between the company and GSK over patent rights of atovaquone and proguanil hydrochloride (Malarone) 250mg and 100mg tablets, the company said in a statement.

Three patents on this drug are set to expire on May 25, 2014, said experts.

Under the terms of the settlement agreements, Glenmark will be able to sell its generic tablets under a royalty-bearing licence from GSK in the third quarter of 2011, or earlier under certain circumstances, it said.

Glenmark is believed to be the first to challenge the patent of this drug. A First to File marketing application with the US drug regulator Food and Drug Administration will help the challenger to sell its generic drug with 180 days exclusivity in the US market upon patent expiry, according to rules for generic drug sales in US.

However, benefits for Glenmark would be limited, as the drug generated sales of only $56 million in the calendar year 2009 in the US market, said industry analysts.

Such out of court litigation settlements are common in the US generic drug business. While it helps the innovator to delay generic launches, generic players get assured business free of risks associated with the litigations.

Glenmark share prices closed at Rs 274.35 at close of trading on the Bombay Stock Exchange today, 1.61 per cent lower than close of trading yesterday. The settlement agreements were still subject to review by the Federal Trade Commission and the Department of Justice, Glenmark said.