Sun Pharma slips on suit over patent infringement

Sun Pharmaceutical Industries fell 2.34% at Rs 432.40 at 10:57 IST on BSE on reports the company's unit Sun Pharma Global Inc was sued by Swiss-drugmaker Hoffman-La Roche and Warner Chilcott Co in the US for alleged patent infringement over Actonel.

The stock hit a high of Rs 444 and a low of Rs 425.15 so far during the day. The stock had hit a record high of Rs 476 on 12 November 2010 and a 52-week low of Rs 280 on 22 January 2010.

The stock underperformed the market over the past one month till 20 December 2010, falling 0.21% compared with the Sensex's 1.55% rise. The scrip had, however, outperformed the market in past one quarter, gaining 17.95% as against 0.09% decline in the Sensex.

India's largest drug maker by market capitalisation has an equity capital of Rs 103.56 crore. Face value per share is Rs 1.

Actonel is used for treating bone disorder disease osteoporosis. According to reports, the once a monthly dosage form, an improved version of Actonel, is manufactured and sold by Warner Chilcott and was approved by the US Food and Drug Administration (FDA) on 22 April 2008. Roche is the owner of the patent under dispute.

Roche and Warner Chilcott is reported to have filed the case with the United States District Court for the District of Delaware on 10 December 2010.

In December 2008, Sun had informed Roche that it had submitted a marketing application to the FDA to sell a generic version of once a monthly form of the tablet, without challenging the patent of that drug. In a letter dated 27 October 2010, Sun Pharma Global said the same application had been converted into a 'Para IV certification', which meant challenging the validity of the patent, said the court document.

Actonel and its various versions accounted for $1.4 billion of Procter and Gamble's (P&G's) prescription business of $2.3 billion in the year ended June 30, 2009. Actonel has patent validity till 2013 and beyond for various versions.

In September 2008 and January 2009, P&G and Roche had filed suits in the US District Court of Delaware in response to Israeli drugmaker Teva and Sun Pharma Global's applications, respectively, to market generic versions of 150 milligram (mg) Actonel tablets. Teva lost the case and the motion against Sun Pharma was later withdrawn by P&G and Roche.

Patent litigations are a common strategy of generic companies to boost their US business. According to the rules for generic business in the US, a patent holder has to sue the patent challenger within 45 days to enforce an automatic ban on marketing approval for the applicant for the next 30 months. The first to challenge the patent of the drug gets 180-days of exclusive sales in the US market.

On a consolidated basis, Sun Pharmaceuticals Industries' net profit rose 11% to Rs 503.65 crore on 15.6% increase in net sales to Rs 1370.07 crore in Q2 September 2010 over Q2 September 2009.