Sun kills lawsuit Ranbaxy filed against FDA for pulling its Nexium generic

When the FDA last year yanked away its initial approval of Ranbaxy's generics of two blockbusters including the heartburn med Nexium, the Indian drugmaker fired back with a lawsuit against the FDA. But Ranbaxy is now owned by Sun Pharmaceutical, which sees no upside to fighting with the agency, and so it has dropped the litigation.

In a filing with the Bombay Stock Exchange today, Sun Pharmaceutical said that it had "withdrawn it appeal of the lawsuit filed by erstwhile Ranbaxy Laboratories" against the FDA last fall.

Ranbaxy Laboratories filed the federal action in November after the FDA, citing Ranbaxy's ongoing manufacturing concerns, withdrew its earlier approval of Ranbaxy generics for AstraZeneca's ($AZN) blockbuster Nexium and Roche's ($RHHBY) Valcyte. The patent for Nexium had lapsed the previous May. Ranbaxy had the exclusive but because the plant where it was to produce the drug was sidelined by FDA issues, had been unable to bring its drug to market. The same situation had delayed generics of Novartis' heart drug Diovan by nearly two years, keeping consumers from benefiting from cheaper version of the drug, and the agency was under pressure not to let that happen again.

But it would be a big financial hit to the Indian drugmaker, which was trying to stop the FDA from approving any other versions of the drugs until it has been able to realize its 180-day exclusives for the drugs. A federal judge quickly swatted the legal action aside, leaving Ranbaxy to appeal. Meanwhile the FDA has allowed other drugmakers to get generics into the market.

Sun Pharma in March completed its $4 billion buyout of Ranbaxy. Managing Director Dilip Shanghvi has pledged that it will work closely with the FDA to get four four banned Ranbaxy plants into 100% compliance with FDA requirements. He has said that "We will do whatever it takes to win back the confidence of the regulators." Today, Sun said that it does not believe that killing the suit "will have any materially adverse financial impact on the Company."

Withdrawing the litigation, however, leaves unresolved the legal question of whether, when the FDA grants an 180-exclusive for a generic, it has the right to pull it.

- here's the BSE filing

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