Ranbaxy loses generic exclusivity over $6 billion Nexium market

Drugmaker Ranbaxy on Tuesday said that the US Food and Drug Administration (FDA) has determined that the Indian drug manufacturer has forfeited its 180-day exclusivity to sell generic version of AstraZeneca Plc's heartburn drug Nexium in the US market.

In a filing on BSE, Ranbaxy said, "We have now received a communication from US FDA that they have determined that Ranbaxy has forfeited its 180-day exclusivity for esomeprazole magnesium delayed release capsule 20 mg and 40 mg." Nexium, known chemically as esomeprazole, is a proton pump inhibitor used to reduce acid in the stomach to treat gastroesophageal reflux disease (GERD). The annual sales of the drug is approximately $6 billion in the US, according to IMS data as of November 2014.

While Ranbaxy said it is disappointed with the result and is pursuing all available legal options to preserve its rights, Israel-based Teva Pharmaceutical Industries received an approval from US FDA to manufacture and sell the blockbuster Nexium.

In a press release, Teva said it is preparing to launch the product in the near future. However, the company did not say whether it has received an 180-day exclusivity from the US FDA to launch the drug in the US market.

The approval is the first generic equivalent to Nexium by the agency, after it cancelled its tentative approval for Ranbaxy's abbreviated new drug applications (ANDAs) for esomeprazole magnesium delayed-release capsules. Last November, Ranbaxy said that FDA has rescinded the previously granted tentative approvals for esomeprazole magnesium delayed release capsules. "FDA has said that its original decisions granting tentative approvals were in "error" because of the compliance status of the facilities referenced in the ANDAs at the time the tentative approvals were granted," the company said then during its filing on BSE.

The Gurgaon-based company then filed a complaint against the US FDA in D C Federal Court and also requested the court for a temporary restraining order to prevent any further action by FDA until Ranbaxy's case is decided. The court, however, denied Ranbaxy's request to block FDA approval for other ANDAs for generic version of Nexium and Valganciclovir (Valcyte) after the drug regulator gave the US-based Endo International and Hyderabad-based Dr Reddy's Laboratories approvals to launch their own copies.

The drug was earlier in news over a patent settlement between AstraZeneca and Ranbaxy involving "pay-for-delay" where it was claimed that AstraZeneca gave nearly $1 billion to Ranbaxy to delay the launch of its generic Nexium until its patent ran out in May 2014. However, last year a US federal court ruled it was not anti-competitive for the companies to agree to delay the launch of a Nexium generic. The suit originally also targeted Teva and Dr Reddy's.

According to analysts, the decision would help the innovator to prolong the arrival of generic player in the market.

"Whether Teva has received exclusivity is not clear. If it has not, then there is a possibility of other players to get approvals and launch. Apart from Dr Reddy's, Lupin and Aurobindo may have also filed for this drug," said a pharma analyst.

Sarabjit Kour Nangra, VP research - pharma, Angel Broking, "Cipla is expected to supply the drug to Teva, which will benefit the company and fully reflect in 2015-16. Thus we enhance our fiscal year 2016 sales and earnings per share (EPS) numbers by 5.9% and 10.4%."