Analysts: Ranbaxy could sell its Lipitor rights

Just three months before it's due to launch a highly lucrative copy of Lipitor, Ranbaxy still doesn't have FDA approval. The Indian company has plenty of regulatory nightmares hanging over its head--so many that settling with prosecutors might cost it more than $1 billion--so gaining the FDA's blessing in time isn't exactly a sure thing.

So, what's Ranbaxy to do? Some Credit Suisse analysts suggest it might waive its Lipitor rights--including the coveted 180-day exclusivity--in return for payment from another drugmaker, either a lump sum or a piece of the sales, Bloomberg reports. It wouldn't be unprecedented; Ranbaxy failed to get its copycat version of the prostate drug Flomax ready to go on time, so it gave up its 180-day first-to-market advantage in return for a one-time payment from Boehringer Ingelheim.

There are a few reasons why Ranbaxy may hold out. The clock doesn't start ticking on that 180-day exclusivity until it launches the drug. If the company believes an FDA settlement is at hand--as executives have been saying for awhile, most recently Aug. 5--why would it give up on its Lipitor knock-off? As Emkay Global Financial analysts Deepak Malik and Ashish Thavkar point out, its settlement with regulators could be a very costly proposition, making that projected $400 million to $500 million in copycat Lipitor sales more important than ever.

Stalling on its Lipitor launch won't make other generic companies happy; their hands are tied until Ranbaxy's 180-day exclusivity period expires. Mylan ($MYL) actually tried to force FDA to nullify Ranbaxy's exclusive rights, given the company's difficulty obtaining approval, but a judge tossed out that lawsuit. Only Watson Laboratories ($WPI) would be smiling; it has a deal with Pfizer ($PFE) to sell an authorized generic beginning Nov. 30. Pfizer also would be happy--any delay in Lipitor generics means more sales of the genuine brand.

- read the Bloomberg story

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