UPDATE 1-Dr Reddy's says U.S. court clears generic Allegra sale

Mon Jan 31, 2011 12:43am EST

* Court lifts injunction; asks plaintiffs for $40 mln security

* Dr Reddy's only generic player for Allegra D24-analyst

* Drugmaker's shares rise nearly 4 pct in weak Mumbai market (Adds quotes, details, background)

MUMBAI, Jan 31 (Reuters) - India's No.2 drugmaker Dr Reddy's Laboratories Ltd (REDY.BO) said on Monday a U.S. district court has cleared the sale of its generic version of Sanofi-Aventis' (SASY.PA) allergy medicine Allegra D24, sending its shares up nearly 4 percent.

The U.S. District Court of New Jersey lifted an injunction passed last June against the Indian drugmaker from selling a copycat version of the drug, Dr Reddy's said in a statement.

"This is a positive for the company. Since Dr Reddy's is the only player for this product, it should be able to do decent sales," Sarabjit Kour Nangra, vice president of research and who tracks the sector at Angel Broking said.

Shares in the company, which dropped over 4 percent in the past four trading sessions on last week's lower-than-expected quarterly results, rose as much as 3.7 percent early on Monday in a weak Mumbai market.

Last week, Dr Reddy's said it had settled patent litigations with AstraZeneca (AZN.L) on two drugs.

Bino Pathiparampil, vice president at IIFL Capital said he expects the product to add 4-5 percent to Dr Reddy's per-share earnings in the next fiscal year ending March 2012.

Dr Reddy's said in its statement on Monday the U.S. court had also asked the plaintiffs -- Sanofi and Albany Molecular Research (AMRI.O) -- to post a security of $40 million towards the possibility the injunction had been wrongfully granted.

"Having been excluded from launching the generic product since the June 2010 hearing, Dr Reddy's intends to pursue an award of this security," the drugmaker said in the statement.

In 2009, Albany Molecular had sued the Indian generic maker alleging infringement of patents related to the manufacturing process of the drug. [ID:nSGE62M0K6]

Last week, Dr Reddy's reported a swing in profit in the third quarter, but missed analysts estimates, hurt by poor sales at its German unit. [ID:nSGE70O087]

Global demand for cheaper generic drugs from drugmakers such as Dr Reddy's and domestic rivals Ranbaxy Laboratories (RANB.BO), Cipla Ltd (CIPL.BO) and Sun Pharmaceutical Industries (SUN.BO) is booming as developed nations battle rising healthcare costs.

(Reporting by Bharghavi Nagaraju; editing by Malini Menon)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.