Shares of pharma major Sun Pharmaceutical Industries rose over 2.5% on Wednesday, after US Supreme Court gave a verdict in favour of its arm Caraco Pharmaceutical Laboratories in the ongoing battle with Novo Nordisk for a generic version of diabetic drug Prandin.
"The Supreme Court, in a unanimous opinion, concluded that Caraco can seek correction of Novo Nordisk's inaccurate use code regarding the combination use of repaglinide and metformin for the treatment of type 2 diabetes. Sun Pharma is pleased that this decision will help all generic companies prevent brand companies from improperly delaying or preventing the marketing of generic drugs against their products by misrepresenting their patents to the US FDA," Sun Pharma said in a statement.
Analysts say the verdict was on expected lines and will give a big boost for Sun Pharma in its efforts to launch the drug in the US market. However, getting the final approval from the US drug regulator for its generic product still is a big hurdle.
"The FDA approval is the key block for Sun given the product was filed from Caraco facility, which is under consent decree. Sun has initiated site transfer a year back and an approval is expected in FY13," said an analyst at a local brokerage.
US authorities had siezed all medicines produced by Caraco at its Detroit facilities in 2009, citing repeated violations of manufacturing standards. The generic drug maker subsequently signed a consent decree. It agreed with US health regulators to resume manufacturing operations at Detroit only after receiving approval from independent experts and the FDA.
Prandin is a registered trademark of Novo Nordisk and has annual sales of about USD 230 million in the US market.
Caraco is eligible to market the drug exclusively for 180 days from launch, but the analyst said it will need to launch it within 75 days from the appeals ruling to retain the six-month exclusivity.
"We expect the drug to generate sales and profit after tax of USD 30 million and USD 18 million respectively during exclusivity period for the company," said Hitesh Mahida of Fortune Equity Brokers.
The drug is worth Rs 0.8/share for Sun Pharma, Mahida said.
Sun Pharma shares were up 2.2% at Rs 597.30 on NSE in afternoon trade. The stock had touch a high of Rs 600 earlier in the day.
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