Drug maker Lupin said on Monday it has settled all patent litigation relating to US drug maker Wyeth’s branded anti-depressant Effexor XR capsules.
Drug maker Lupin said on Monday it has settled all patent litigation relating to US drug maker Wyeth’s branded anti-depressant Effexor XR capsules. Under the deal, Lupin will be free to sell its venlafaxine extended release capsules, a generic version of
the Wyeth drug, from June 1, 2011.
Effexor in all its forms is Wyeth’s top selling drug, generating $819 million in sales in the first three months of 2009. As per estimates by consulting and analytics firm IMS, Wyeth’s Effexor XR capsules had US sales of $3.01 billion in 2008, and accounted for 17% of the company’s net revenues.
According to Kamal Sharma, managing director of Lupin, the settlement is in line with the company’s growth strategies and would help it build a strong market position in the US.
However, all’s not there to rejoice for Lupin. US-based Impax Laboratories and Israeli generic giant Teva have also settled patent litigations with Wyeth in the past for the same drug.
They can launch their versions of Effexor XR in the US from June 2011 and July 2010, respectively.
With other generic players also in the fray, more so Teva, the world’s largest generic company, chances of Lupin garnering in a huge chunk of the market seem minuscule.
“Considering Teva’s size and clout, it can easily capture more than half the market within a year — that’s the time Lupin will be able to launch. So Teva will get a clear advantage by launching it in 2010,” says a research analyst with a brokerage firm in Mumbai.
According to analysts, Lupin could stand to get a close to 20% share in the US market, the opportunity for which is expected to come down to about $1.5-2 billion by 2011 from $3.01 billion now due to price erosion with the launch of generic versions.
If Lupin was to be the only generic player for Effexor XR in the US at that point in time, it could have easily captured about $190 million of the $1.5-2 billion opportunity in six months time, says the analyst from the brokerage firm.
“But now, with two other generic players also in the fray, other than the innovator Wyeth, Lupin could make only about $130 million in six months,” says the analyst from the brokerage firm.
However, according to Sarabjit Kour Nangra, vice-president, research, at Angel Broking, with just three generic players in the Effexor XR market in 2011 (Lupin/Teva/Impax), the opportunity is still quite big. “When more generic players enter, the margins reduce drastically. In 2011, with only three players, the profits will be more.”
Lupin had settled a patent litigation with Schering-Plough in December 2008 relating to desloratadine tablets, the generic version of Schering-Plough’s Clarinex tablets that is used in the treatment of allergies.
With the desloratadine settlement, Lupin can commercially launch the drug, which had US sales of $329 million for the year 2007-08, on July 1 2012.
These two settlements would give a massive boost to Lupin’s US business, which was worth approximately $180 million in 2007-08, and is expected to grow at a minimum rate of 45-50%, according to a Lupin spokesperson.
“Lupin is currently the ninth-largest generic player in the US market in terms of total prescription by market share and these settlements will further strengthen our pipeline,” says the spokesperson.
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