Sun Pharmaceuticals' at-risk launch of generic Protonix may prove to have been risky indeed. Pfizer's ($PFE) Wyeth unit slapped the Indian drugmaker with a $960 million damages claim, alleging Sun's version of the anti-reflux drug diverted hundreds of millions' worth of sales. Sun marketed its Protonix copycat from January 2008 until April 2010, when a U.S. court ordered it to stop.
Wyeth's brand-name Protonix sales hit $1.9 billion in 2007, then dropped by 58% in 2008 after Sun and rival generics maker Teva Pharmaceutical Industries ($TEVA) launched their versions. The $960 million claim includes lost sales, litigation costs and other damages, an analyst told Bloomberg. Wyeth and Nycomed, which owns the original patent, sued Sun and Teva in 2004 to block their copycat versions.
Sun, of course, has a different idea of its liability in the case. "We strongly believe that we have reasons to disagree with the claim that they have made," Sun Pharma spokesman Uday Baldota told India's CNBC-TV, adding the company will continue to fight to invalidate the Protonix patent. "[I]t is just a claim, nothing more."
A settlement of somewhat less than $960 million is likely, one analyst predicts. Souvik Chatterjee of SMC Global Securities figures the parties will "reach an out-of-court settlement between $400 million to $600 million," he wrote in a note to clients (as quoted by Bloomberg). "We are of the opinion that any penalty for Protonix sales will adversely impact Sun Pharma earnings in fiscal 2013."