Troubled Indian Drugmaker Gets FDA Nod To Produce Blood Pressure Generic
International Business Times
Published Jun 27, 2014 06:00AM ET
Updated Jun 27, 2014 06:15AM ET
Troubled Indian Drugmaker Gets FDA Nod To Produce Blood Pressure Generic
By Reuters - Ranbaxy Laboratories Ltd. (NSE:RANB) has received approval from the U.S. Food and Drug Administration (FDA) to launch a cheaper copy of Novartis (NYSE:NVS) blood pressure pill Diovan, bolstering its outlook after a raft of regulatory bans for poor production quality at its India facilities dented investor sentiment.
Ranbaxy, which is in the process of being acquired by drugmaker Sun Pharmaceutical Industries Ltd. (NSE:SUN) for $3.2 billion, will be the first company to launch a copy of Diovan in the United States and will be entitled to six months of exclusivity to sell it.
The drug should add about $200 million to Ranbaxy's sales and $100 million to its profit after tax during the exclusive sale period, said Praful Bohra, a senior research analyst at Mumbai-based brokerage Nirmal Bang.
Swiss drugmaker Novartis lost its patent rights to its once best-selling Diovan in the United States at the end of 2012, but has avoided generic competition because of multiple production quality control problems at Ranbaxy.
All of Ranbaxy India-based plants have been barred by the FDA from exporting to the United States due to violations of its good manufacturing practices. Ohm Laboratories, a unit of Ranbaxy in New Jersey, is allowed to make drugs for its largest market.
The FDA over the past year has stepped up its scrutiny of drugmakers in India, which is the biggest supplier of medicines to the United States.
Worries about quality control problems in India's $15 billion drug industry came to the fore as multiple plants run by companies including Ranbaxy and Wockhardt were barred from exporting to the United States.
Bill Winter, a vice president at New Jersey-based Ohm Labs, said in a statement the Diovan generic would be launched "as soon as sufficient supplies are manufactured to meet the needs of the market."
Ranbaxy's shares rose 5.4 percent to 498.40 rupees at 1:12 p.m., while Sun Pharma was trading 4.2 percent higher to 662.10 rupees, pushing the healthcare sub-index to a record high.
FIRST TO FILE
The Ranbaxy statement did not say when the generic version of Diovan, which had global sales of $3.5 billion in 2013, will be launched. A Ranbaxy spokesman in India did not respond to a request for comment.
Ranbaxy was also the first company to file with FDA seeking approval to launch generic versions of two other top-selling drugs - Astrazeneca's (NYSE:AZN) blockbuster heartburn drug Nexium and Roche's (XETRA:RHO6y) antiviral Valcyte.
Get The News You Want
These two drugs are pending final approval from the FDA.
Last month, Ranbaxy Chief Executive Arun Sawhney said he was "confident" that the company would be able to reap the benefits of these exclusive marketing opportunities.
He did not elaborate.
"I think the Diovan generic approval is definitely a validation of their comment that they will be able to launch Valcyte and Nexium as well," Nirmal Bang's Bohra said.
Written By: International Business Times
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.