Wockhardt stock soars on patent row settlement

Deal allows drug major to sell generic version of Neudexta from 2026

The share price of Wockhardt jumped 20 per cent on the BSE on Tuesday to touch Rs 616.50, as the company inked a settlement of a pending patent litigation with US-based Avanir Pharmaceuticals Inc.

The settlement gives Wockhardt the rights to start selling a generic version of Nuedexta on July30, 2026 or earlier, under certain circumstances. The settlement agreement, in compliance with US law, will go to the US Federal Trade Commission and the Department of Justice. Both parties have also agreed to file a stipulation and order of dismissal with the District court of Delaware, which will end the litigation with respect to Wockhardt.

A detailed questionnaire sent to Wockhardt did not elicit any response. Avanir confirmed the settlement in a statement. Nuedexta is used for the treatment of pseudobulbar effect, which occurs secondary to a variety of otherwise unrelated neurological conditions, and is characterised by involuntary, sudden, and frequent episodes of laughing and/or crying. According to analysts, the settlement is seen as a major positive for the stock, which has been facing tough times after the company came under the US Food and Drug Administration (FDA) scanner.

On Tuesday, Wockhardt shares opened at Rs 533 and hit an upper circuit of 20 per cent around noon as it touched Rs 616.50, up from its previous close of Rs 513.75.

Besides the settlement, the Street was also abuzz with speculation that the company’s Chikalthana facility, which was recently inspected by the US Food and Drugs Administration (FDA), may soon get a clearance from the regulator.

The expected development assumes significance as the company’s Waluj facility, near Aurangabad, is under the US import alert since July for violation of manufacturing norms. Key medicines manufactured from the Waluj facility are barred in the US market.

An approval for the Chikalthana manufacturing unit is likely to enable Wockhardt to restart supplies of products to the US and also file fresh drug applications.

The stock has also rallied around 30 per cent in past three trading sessions after the company said its promoter, Khorakiwala Holdings & Investments Private Ltd, had acquired 211,094 equity shares of the pharmaceutical company via market purchase.