Sun Pharmaceutical Industries Ltd. (BOM:524715) announced Thursday that one of its subsidiaries has settled a case with Novartis Pharmaceuticals Corporation, which includes the dismissal of lawsuits filed against it in the U.S., regarding a generic version of Novartis’ cancer drug, Gleevec.
Following the settlement, Sun Pharma, which generated $1.1 billion in revenues in 2013 from the U.S. market, announced that its subsidiary may launch the generic version of Gleevec from February 2016. Sun Pharma, which is based in Mumbai, India, had in 2007 applied for approval to sell Gleevec's generic version in the U.S., which was challenged by Novartis, while in 2006, India had denied Novartis permission to sell the drug in the country.
“Under the terms of the settlement agreement, Sun Pharma’s subsidiary may launch its version of generic Gleevec in the United States on February 1, 2016,” Sun Pharma said, in a statement. The basic compound patent for Gleevec expires in the U.S. on July 4, 2015, according to a statement from Novartis.
"This settlement validates the Novartis patents while allowing Sun Pharma's subsidiary to enter the market with its generic product," Novartis said in the statement.
Novartis has recently been involved in deals worth $25 billion aimed at increasing focus on its cancer business and the latest settlement provides the Swiss company with seven more months in which to sell its hugely successful cancer drug without competition from a generic version by Sun Pharma.
The U.S. market for Gleevec, which is used to treat chronic myeloid leukemia, was worth about $2 billion in 2013. However, while Sun Pharma’s subsidiary holds a tentative approval from the Food and Drug Administration, or FDA, for selling the generic version of Gleevec, the company’s settlement is subject to regulatory approvals.
Sun Pharma, which generates 72 percent of its overall sales from global markets, has struggled to maintain a clean record with the FDA due to product recalls in March when the company recalled a batch of its generic version of the diabetes medicine, Glumetza.
The company also struck a deal in April to acquire yet another troubled Indian drug maker, Ranbaxy Laboratories Limited (BOM:500359), in an all-stock deal worth $3.2 billion, to become the largest drug maker in the country and the fifth-largest generic drug company in the world. Ranbaxy, which is currently banned by the FDA from exporting to the U.S. from three of its Indian units, paid nearly $500 million in fines to the FDA last year.
However, the merger is far from complete because allegations of insider trading in Ranbaxy stock before the deal was announced led the apex court of the state of Andhra Pradesh to halt the transaction, and on Wednesday, Sun Pharma approached the India's supreme court to approve the merger.