As Indian companies focus on anti-diabetes, Court rejects AstraZeneca's plea on diabetes drug patent

Indian drug company, Laurus Labs (BSE: 540222) is set to boost capacity with a $202 million infusion, underscoring the inherent advantages of Indian pharmaceutical firms that focus on molecules in diabetes, ophthalmology, and cardiovascular therapy. While three out of the top seven largest-selling drugs in the country are now anti-diabetes, the therapy is registering a robust double-digit growth year-on-year, reports The Pharma Letter’s India correspondent.

India houses the second-largest number of people with diabetes - more than 95% of whom have type 2 diabetes - second only to China. According to the International Diabetes Federation, with the current explosive growth trends, the number of diabetics is likely to increase to 134 million in 2045 from 77 million in 2019.

Aided by product launches and sale of medicines for chronic ailments such as cardiac and diabetes, India’s pharmaceutical market has grown at its fastest pace in six months. Pharma sales grew by nearly 10% year-on-year (yoy) in October due to growth across all therapy segments, according to data released by market research firm AIOCD-AWACS.

Apart from domestic growth, India's pharma exports are on course to cross $23 billion for the first time this fiscal year after rising 14.85% yoy at $11.78 billion in the first half.

Ravi Uday Bhaskar of Pharmexcil says the country is likely to sustain similar growth in pharmaceutical exports in the second half of the fiscal period, following indications of demand. Last fiscal year, India exported $20.58 billion worth of pharmaceuticals.

Growth in exports is driven by drug formulations and biologicals, whose shipments grew a record 21.85% yoy to $8.99 billion in the April-September period as countries around the world turned to India to meet a rise in demand in the midst of the Covid-19 pandemic.

For the first time in the history of Indian pharmaceutical exports, the first half accounted for 76.3% of overall pharmaceutical exports, up from around 72% a year earlier.

Domestic growth

The pharmaceutical sector is the top performer in India’s $2.1 trillion equity market this year after the Coronavirus pandemic turned global investors’ spotlight on drug companies.

Laurus Labs, which reported a more than four-fold jump in its reported second-quarter profit from a year ago, is a global supplier of antiretroviral APIs and intermediates. Oncology and anti-diabetic are its core areas. Revenues jumped 60% on a year-on-year basis, with operating margin at 33%. Laurus Labs plans to expand its portfolio over the next two years by focusing on molecules in diabetes and cardiovascular therapy.

Laurus Labs has seen its stock surge 350% so far in 2020. In  th second quarter, its generic API division showcased a growth of 22% yoy while generic FDF revenue jumped 183% yoy, led by increased volumes from North America and EU.

Given the high stakes in the domestic diabetes market, many Indian companies have been rushing to market their drugs, eager to grab a slice of the growing $2.02 billion diabetes market.

Another home grown major has also seen its stock price soar on the bourses given its focus on diabetes. At the end of last month, Zydus Cadila received tentative approval from the US health regulator to market Linagliptin tablets, used to treat type 2 diabetes in adults.

The medication contains a combination of empagliflozin and linagliptin.

In India, Zydus is engaged in a court case along with other Indian companies, for a diabetes drug.

Price war

British pharma major AstraZeneca (LSE: AZN) had dragged a dozen Indian generic drugmakers to the Delhi High Court to prevent them from manufacturing and selling low cost versions of its diabetic medicine dapagliflozin.

At the end of last week, the Delhi High Court rejected AstraZeneca’s application seeking a restraining order against marketing of dapagliflozin by several domestic companies, including Zydus, Eris LifeSciences, Torrent, Mico Labs, paving the way for affordable diabetes drugs in the Indian market.

AstraZeneca was also denied an injunction by the Delhi High Court against Intas Pharmaceuticals and Alkem Laboratories, both defendants in a case relating to the manufacture of dapagliflozin.

Both the cases were fought against alleged infringement of AstraZeneca's patent rights by local pharmaceutical firms. While the basic (genus) patent on dapagliflozin - a drug that generated $1.54 billion through global sales under brand names Farxiga and Forxiga in 2019 - expired on October 2, it is still protected by a more specific (species) patent till May 15, 2023, in India.

Indian firms like Natco, Ajanta, Torrent, Emcure, Intas, Alkem, MSN, USV, Zydus, Eris and Micro Labs were contesting the second patent claim.  

An earlier complaint filed against West Coast Pharma was settled on August 25, 2020, after the company gave an undertaking in the High Court that it recognizes the patent rights of AstraZeneca and will not manufacture or market dapagliflozin in any form that may amount to infringement of the patents.  

Dapagliflozin is marketed in India by Sun Pharma and Abbott Healthcare through licensing agreements with AstraZeneca.  

The litigation series began after AstraZeneca approached the Court against Hyderabad-based Natco Pharma's decision to launch generic dapagliflozin under the brand name 'Dapnat' in March 2020. AstraZeneca's petition says that the patent on the drug, which was introduced in Indian market after obtaining appropriate permission in 2015, was not subject to either pre grant nor post grant objections.

The complaint adds Natco took advantage of the pandemic, flooding the market with the drug worth $2 million. In its response, Natco said it stopped production and sale of Dapnat from December 31, 2019. Given the difficulty to recall products, the company said it would give a bank guarantee for $404,620 that could be encashed by AstraZeneca in case of a court verdict in favor of the multinational.

Five other companies - Zydus Healthcare, MSN laboratories, Eris Life Sciences, USV Limited and Alkem Pharma - also announced plans to launch respective branded generic versions of Dapagliflozin after the October 2 expiry of the basic patent.