June 18 www.Bloomberg.com reported -- Pfizer Inc. and India's Ranbaxy Laboratories Ltd. agreed to keep copies of the cholesterol pill Lipitor off the U.S. market an extra 20 months, a move that may generate an added $12 billion for the U.S. drugmaker.
Under a lawsuit settlement, Ranbaxy won't sell generic versions of Lipitor, the world's best-selling drug, until November 2011, New York-based Pfizer said today in a statement. Analysts had projected Ranbaxy would enter the market in March 2010, when the main patent expires, while Pfizer was using litigation to delay competition until 2016.
The deal buys Pfizer Chief Executive Officer Jeffrey Kindler more time to find new drugs to replace as much as $12 billion a year at risk when Lipitor copies become available. Investors have been skeptical that Kindler, a former lawyer, can offset the losses with a plan that includes increasing sales of current products, cost cutting and speeding new drugs to market. Since Kindler took command in July 2006, Pfizer, the world's biggest drugmaker, has lost 32 percent of its value.
The settlement ``removes the risk inherent in litigation'' for both companies, said David Reid, Pfizer's acting general counsel. Pfizer had sued Gurgaon, India-based Ranbaxy in federal court to keep Lipitor copies off the market for eight years.
Caduet, a Pfizer drug that combines Lipitor and the company's blood pressure medicine Norvasc, also will be available in generic form in 2011 under the deal. Caduet last year generated $568 million in global sales. In addition to the U.S. cases over Lipitor and Caduet, the agreement settles Lipitor lawsuits in 11 countries.
Shares Rise
Pfizer rose 3.4 percent to $18.33 at 7:53 a.m. in early trading today, after falling 5 cents yesterday to $17.72 on the New York Stock Exchange. Ranbaxy shares rose for the fourth straight day by 15.65 rupees, or 2.7 percent, to close at 597.5 rupees a share in Mumbai trading today, their highest value since January 7, 2005.
Pfizer and Ranbaxy have been fighting in U.S. courts since 2003 over Ranbaxy's bid to sell generic Lipitor. Pfizer sued Ranbaxy again in March, this time over patents expiring in 2016 related to the process of making atorvastatin, the active ingredient in Lipitor. Pfizer has another patent on Lipitor that expires in 2017.
Pfizer was also asking the U.S. Patent and Trademark Office to reissue a patent expiring in June 2011 that was invalidated by an appeals court. In the first round of the review, the patent office rejected that request.
Sale of Ranbaxy
Daiichi Sankyo Co., Japan's third largest drugmaker, said on June 11 it would buy control of Ranbaxy for as much as $4.6 billion. On June 13, Ranbaxy's shares rose to a three-year high after the Business Standard in India reported Pfizer may make a hostile bid for the Indian generic-drug maker.
``We're not intending to buy the company,'' Pfizer's Reid said in an interview yesterday.
Pfizer has faced a string of setbacks since 2006, when the company halted testing on the experimental cholesterol pill torcetrapib, which had been positioned to replace Lipitor. Last year, the company stopped selling its inhaled insulin Exubera, projected to have $1 billion in annual revenue, and sales of its smoking pill Chantix have fallen almost a third after it was tied to suicides in January.
Roopesh Patel, an analyst at UBS Securities LLC in New York, said Lipitor could drop as much as 70 percent beginning in March 2010, when generics were expected to be available.
Patent Upheld
A U.S. appeals court had upheld the patent expiring in 2010. Other litigation, pending in federal court in Wilmington, Delaware, could have kept the Lipitor copies off the market until 2016 and Caduet generics until 2018.
Ranbaxy was the first to challenge the Lipitor patents, which would give it the right to have the only approved generic version on the market for six months.
Ranbaxy Chief Executive Officer Malvinder Mohan Singh said the agreement ``provides certainty and visibility'' to his company's efforts to sell generic Lipitor. Singh said the 2010 proposal ``depended on successfully crossing the hurdles posed by Pfizer's other patents that expire in the next eight years.''
Teva Pharmaceutical Industries Ltd., the world's biggest generic-drug maker, also is challenging the Lipitor patents in a case pending in Delaware. Teva was first sued by Pfizer over Lipitor in June 2007 and, typically, patent suits in Delaware take three or more years to be completed, including appeals.
Under the settlement, Ranbaxy will be able to enter the market at set dates in seven other countries, mostly around September 2011, depending on the expirations of patents and other regulatory periods in those areas. The seven countries are Canada, Belgium, Netherlands, Germany, Sweden, Italy and Australia.
Other Countries
Ranbaxy will continue to sell generic Lipitor in Malaysia, Brunei, Peru and Vietnam. Litigation remains in Finland, Spain, Portugal, Denmark and Romania.
The agreement also settles lawsuit over the Viagra impotence drug pending in Ecuador, and one over the blood pressure medicine Accupril pending in New Jersey.
In the Accupril case, Ranbaxy and partner Teva began selling copies of the drug in December 2004 before they were ordered to stop by a court. Pfizer was seeking compensation for the lost sales. Terms of the agreement over Accupril are confidential and the patent has expired, said Pfizer spokesman Chris Loder.
The Lipitor case is Pfizer Inc. v. Ranbaxy Laboratories Ltd., 08cv164, U.S. District Court District of Delaware (Wilmington). The Caduet cases are Pfizer v. Ranbaxy, 08cv162 and 07cv138, also in Wilmington. The Accupril suit is Pfizer Inc. v. Teva Pharmaceuticals USA Inc., 05cv620, U.S. District Court in the Newark, New Jersey.
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