Mylan tries to block Ranbaxy’s Lipitor exclusivity

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Mylan tries to block Ranbaxy’s Lipitor exclusivity

Generics/News | Posted 22/04/2011 1 Post your comment

Cholesterol fighter Lipitor (atorvastatin calcium) has been the worlds ‘best-selling drug’ for the last 10 years, and has been a major source of income for the world’s biggest drug company, Pfizer. Lipitor was released in 1998, and by 2006 it had reached peak sales of US$12.9 billion, accounting for 27% of the company’s revenue. In 2010, with US$10.8 billion in sales, Lipitor still accounted for 15.8% of total revenue, even with the addition of Wyeth’s operations.

In 2008, Pfizer reached an agreement with Indian generics manufacturer Ranbaxy Laboratories. Ranbaxy will have a license to sell generic version of atorvastatin in the US as of 30 November 2011 and will have exclusivity for 180 days before other drugmakers can enter the market.

However, Mylan has now sued the FDA, seeking to terminate Ranbaxy’s exclusive marketing rights to sell a generic version of Lipitor for six months in the US, which could rake in almost US$600 million for the Ranbaxy, according to Bloomberg.

Mylan says that Ranbaxy is not eligible for the marketing exclusivity because of ‘false and unreliable data’ from its manufacturing site in Paonta Sahib, India, used in Ranbaxy’s application for generic atorvastatin.

Mylan is attempting to force the FDA to say publicly whether Ranbaxy’s application ‘is tainted by Ranbaxy’s misconduct’ and that therefore the application and the corresponding 180-days exclusivity denied.

If it gets its way, Mylan would be able to enter the US market with its generic version of atorvastatin in June, when some of the Lipitor patents expire.

Ranbaxy already markets generic atorvastatin in Canada and South Africa and has stated that it is working with regulators to resolve outstanding questions and that it also intends to move the manufacturing of generic atrovastatin to New Jersey, USA.

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Source: Bloomberg, The Economic Times, The Hindu

Comments (1)

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Posted 25/04/2011 by Vishal

Mylan -FDA Court to rule on 28th april

Recall last month, Mylan had sued FDA in the US district court seeking a forfeiture of Ranbaxy’s 180 days exclusivity on Lipitor. A hearing on the motions is scheduled for 28th April at 9:30 am (US Time).

The decision could go either way, and I expect a 10% stock price movement either way depending on the outcome. In such a case I would recommend a straddle on Ranbaxy as significant volatility in stock price is expected.