Teva's Provigil may be one Ranbaxy forfeited in consent decree

Giving up its 180-day exclusivity on three unidentified drugs was a key penalty imposed on Ranbaxy Laboratories as part of its consent decree with U.S. authorities over manufacturing lapses and faking FDA data. Now, analysts believe that they have identified Teva Pharmaceutical Industries' blockbuster Provigil as one of those three, estimating that it is costing Ranbaxy up to $100 million in sales to sit this one out.

"The market has assumed that they have given up on the exclusivity of this product," Surajit Pal of Elara Capital tells The Economic Times.

The Justice Department in January announced a "groundbreaking" consent decree with the India drugmaker, requiring it to make "fundamental changes" to plants in the U.S. and India. The plants were banned from providing products to the U.S. until problems were corrected. It also was ordered to forfeit its sought-after 180-day exclusivity on three drugs--their identities filed under seal--and perhaps relinquish those rights on three more if it doesn't meet certain regulatory milestones.

Since the company has done nothing with its application on Provigil, analysts say that clearly is one of the three and that the market has already priced that realization into its stock price.

Generic drugmaker Teva ($TEVA) picked up Provigil last year when it bought Cephalon as a way to move into branded drugs. The sleep disorder medication generated $1.2 billion in sales last year, but is now off patent. Analysts say that could add up to $50 million to $100 million in revenue for the generic drugmakers that get to make their own version for the first 6 months.

In a bit of a turnabout, the FDA in April granted Teva as a generic maker permission to share the 180-exclusivity with Par Pharmaceuticals. Mylan ($MYL) sued the company over that move and last month it was granted a share of the exclusive action. Ranbaxy, however, has not been in the mix.

"It is quite clear. Ranbaxy won't launch its drug," another unidentified India-based analyst tells the newspaper.

It is not as though Ranbaxy has not been racking up some impressive results. It doubled its U.S. sales in its first quarter after the FDA gave approval to one of the plants that had been banned from shipping drugs under the consent decree and allowed the company to sell a generic version of Pfizer's ($PFE) Lipitor.

- read the Economic Times story 

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