Ranbaxy set for Rs 1000 cr boost from Valtrex clone

Gurgaon-based Ranbaxy Laboratories has launched generic Valtrex (valacyclovir hydrochloride) tablets in the US, over two years after it settled a patent dispute with GlaxoSmithKline (GSK) and secured a 180-day sales exclusivity for it.

“We have launched 500 mg and 1 gm tablets of valacyclovir hydrochloride in the US market,” a company spokesman said. According to analysts, the opportunity is worth about $200 million, or Rs 1,000 crore, for Ranbaxy.

Valacyclovir is an antiviral drug used to treat genital herpes, cold sores and shingles. It is also categorised as a prodrug, which means a pharmacological substance that is administered in an inactive form but metabolises into an active form within the body. “The drug has annual sales of $2.2 billion,” the Ranbaxy spokesman said.  The launch of generic Valtrex was delayed because of manufacturing issues at the company’s Dewas plant, where it had earlier planned to make the drug.

“We are making the drug at our US facility,” the spokesman said, to the relief of investors and analysts. Ranbaxy’s Dewas and Paonta Sahib facilities have been struggling to get accreditation from the US Food and Drug Administration after the regulator charged them for having sub-standard manufacturing facilities. All the same, the six-month sales exclusivity on valacyclovir means a clear upside for Ranbaxy, say analysts.

The US Patent and Trademark Office first issued a patent on valacyclovir to Burroughs Wellcome Co in 1990. In 1995, Glaxo Inc merged with Burroughs Wellcome to become Smithkline Beecham Corp and started doing business as GSK. In 2003, GSK filed a law suit against Ranbaxy, charging it with infringement of its patent on the drug. Ranbaxy, too, filed a suit challenging the validity of GSK’s patent. In July 2007, the two companies reached an agreement and settled the dispute.

Going by analysts, the settlement was an indication of GSK’s intention to be on the good side of Ranbaxy. Not only did it ensure the MNC could enjoy its patent till 2009, but also laid the ground for several co-development agreements between the two.