Ranbaxy Settles US Patent Litigation

Investments in R&D coupled with smart litigation strategies are yielding dividends for Ranbaxy Laboratories.The company has reached an out of court settlement with Glaxo SmithKline for Valtrex, a drug used for treatment of Herpes infections.

Under the agreement Ranbaxy will have 180 days of exclusivity to sell the generic version of Valtrex starting 2009 end.According sources Ranbaxy expects $400-$500 million sales during the 180 day exclusivity period and company sources say it expects the market size of Valtrex to be about $1.7-1.8 billion by 2009 end. And it expects that the drug launch will help improve margins significantly. Ranbaxy''s share price rose nearly 10 per cent on Thursday, its biggest single day gain in more than a year. Analysts expect the stock to be re-rated on a forward earning basis.

Ranbaxy''s management says it will continue to leverage and monetise it''s pipeline of first-to-file opportunities, which currently stands at $29 billion. It also plans to release one generic copy of a top selling drug each year to meet its revenue target of $5 billion by 2012.