US court ruling scuttles Dr Reddy's

DALAL STREET SPIKES

The share price of Dr Reddy's Laboratories plunged on the Bombay Stock Exchange (BSE) owing to a US court ruling that the company's version of the world's top-selling hypertension drug has infringed Pfizer Inc's patent.

Pfizer's patent on the drug expires in 2007. This means that DR Reddy's cannot market its version of the drug in the US markets till that period.

According to market sources, this is definitely a set-back for the company in the short-term which resulted in the stock crashing by 18.13 per cent in morning trades.

The stock, though, recovered from an intra-day low of Rs 995 to end at Rs 1,015.20, down Rs 225 from its previous close, with a trading volume of more than 6.13 lakh shares on the BSE.

Analysts said the impact of the legal and other expenses incurred by the company will have an adverse impact on its earnings.

On Friday, the Dr Reddy's American depositary receipts had tanked 12.5 per cent to $ 25.45 on the court's decision.