Two US court verdicts go against Sun,shares fall 4.7%

A US court ruled against Sun Pharma and Teva in a patent infringement case,saying Pfizer Inc had valid a patent for the heartburn drug Protonix,which Sun launched ‘at risk’ in the US market in 2008. This is not the final verdict on the matter,but if Pfizer’s patent is found to be valid in the later verdict too,Sun is liable for damages to Pfizer for lost sales and legal cost. In another case,a US court banned Sun from selling a generic copy of the French drug maker Sanofi Aventis’ cancer medicine Eloxatin from June 30 this year.

These two setbacks dragged the company’s stock down. Its shares plunged 4.77% or 80 points on the BSE to end at Rs 1,604.25 on Monday. The benchmark sensex gained 51 points. Earlier this month,shares of the company had seen a 52-week high of Rs 1,846. “Currently,we have not taken any decision to stop our sale of Protonix generic. We are anyway continuing Eloxatin generic till the date permitted,” a Sun Pharma spokesperson said. When asked if the company will appeal against these orders,he said,“For Protonix case,we need to wait for a judgment from the court. It is quite premature to talk about appeal in this case. For Eloxatin case,we are yet to decide.”

Sun Pharma launched Eloxatin in the US just two months back. The company did not provide its revenues from the two products,saying it does not disclose product specific sales. Industry sources said the company’s Eloxatin sales in the US is not very significant,but Protonix is. Protonix sales from Pfizer reached $1.9 billion in 2007,and then fell 58% in 2008,after Teva began selling its generic version. Sun entered the market in January 2008,a month after Teva. Eloxatin,a Sanofi Aventis drug,generates sales of around $1.4 billion in the US. Caraco,Sun’s subsidiary in the US,had a Q3FY10 sales of $52 million (Rs 234 crore),which was a drop of 7% from the corresponding quarter last year. Caraco recorded a net loss of $3 million (Rs 13.5 crore) for Q3FY10.