Dr Reddy’s Nexium plan faces hurdle

Dr Reddy’s Laboratories (DRL) plans to get a pie of the $4 billion market of generic Nexium are likely to be cut short by the patent holder of the drug AstraZeneca.

The blockbuster drug’s generic esomeprazole is used in the treatment of dyspepsia, peptic ulcer disease, gastroesophageal reflux disease and Zollinger-Ellison syndrome.

Several pharma companies have been trying to take on AstraZeneca for finding ground in the market.

With the patent on the drug slated for expiry in 2014, AstraZeneca, too, has been working on strategies to check the competition from Dr Reddy’s by settling the patent challenge out of court.

AstraZeneca has already settled disputes with another Indian pharma major Ranbaxy and the world’s biggest generic company Teva.

“Dr Reddy’s is yet to settle the dispute though the issue is pending in the US courts. But, it is more in the interest of AstraZeneca to settle the dispute. AstraZeneca has been trying to keep away the competition to protect its market at least till 2014 when the copy-cat generics are likely to flood the market,” a source tracking the developments said. However, Dr Reddy’s officials refused to comment citing silent period ahead of its Q3 results next week.

For the nine months ended September 2009, AstraZeneca has about $3.7 billion revenue from Nexium. With the drug promising to keep the cash books ringing till 2014 provided there is no generic competition coming in, the British drug company is also wary of the costs involved in handling the disputes from the generic companies like Dr Reddy’s.

“The off-patent regime is resulting in a scary scenario for many innovator companies, more so due to a weak pipeline for future revenues. Though there are no indications of any amicable settlement at this point, the settlement between AstraZeneca and Teva has given a clear indication of what is in store for Dr Reddy’s,” a legal affairs officer of another generic company in Hyderabad said.

As part of the settlements with Ranbaxy and Teva, AstraZeneca has guaranteed a right to sell the drug ahead of anyone else at the time of the patent expiry. In the case of Ranbaxy, AstraZeneca has guaranteed a six-month exclusive sale much before the market is opened for other generic firms.