Ranbaxy manufacturing mess costs it approvals for Nexium, Valcyte

Even though Ranbaxy Laboratories' manufacturing shortcomings kept it from launching its exclusive generic of Novartis' ($NVS) blockbuster Diovan for nearly two years, the FDA allowed the Indian company to keep that prize. The agency even fought off legal challenges which pointed out that consumers and payers, including the government, were being hurt by the decision. But Ranbaxy is not so lucky with its exclusive for Roche's ($RHHBY) antiviral Valcyte and its hopes for big rewards.

Ranbaxy said today that the FDA has withdrawn its 6-month exclusivity for Valcyte. It also said it had lost its tentative approval for AstraZeneca's ($AZN) heartburn blockbuster Nexium. Nexium went off patent in May and Valcyte went off patent last year. "Ranbaxy is disappointed with this development and is actively evaluating all available options to preserve its rights," a statement from the company said.

The agency said there were not data integrety issues but that it had made the approvals "in error because of the compliance status of the facilities referenced in the applications," the statement says.

So far, there has been no indication of the FDA's plans for other drugmakers to sell generics of the two drugs.

Novartis' heart drug Diovan went off patent in September 2012, but at that point the FDA had issues with the Indian plant where Ranbaxy was planning to make the drug. The agency finally banned that plant, as well as another where the API would have been made, over concerns that the drugmaker had faked some testing data on drugs. Several challenges were made to force the agency to cancel the exclusive. That included a federal lawsuit by generics maker Mylan ($MYL) that wanted the exclusivity for itself, but a court sided with the FDA, which indicated it had no legal authority to revoke Ranbaxy's approval.

The FDA worked with the Indian company to move manufacturing of the drug from its banned Indian plant to its Ohm Laboratories facility in New Jersey. Ranbaxy found an outside supplier for the API, and in June, it finally launched the generic, reaping big sales in the process.

But there was no indication that Ranbaxy was in a position to pull off the same workaround for a generic version of Nexium or Valcyte, and it is unknown when remediation at the Indian plants will satisfy the FDA. Sun Pharmaceutical has a deal to buy Ranbaxy and has promised to work with the FDA on the issues, but that sale will not close until at least the end of this year. In September, the FDA received a Citizen's Petition, joined by Connecticut Attorney General George Jepsen, urging the FDA to cancel the exclusive for Nexium, saying it was hurting consumers.

At about the same time that Ranbaxy made its announcement, AstraZeneca was releasing its earnings, reporting better-than-expected revenues because a generic of its popular heartburn medicine had yet to launch.

- here's the release (PDF)
- read the Reuters story 
- get more on AstraZeneca