Celgene settles patent row with Sun Pharma over oncology drug

Indian drug major Sun Pharmaceutical Industries (BSE: 524715) has settled the patent litigation over a generic version Revlimid (lenalidomide) in the USA.

Celgene, a wholly-owned subsidiary of Bristol Myers Squibb (NYSE: BMY), has granted Sun Pharma a license to sell a limited quantity of the generic blood cancer drug, which has annual sales of around $8 billion, beginning after March 2022. The license further extends the potential to an unlimited quantity after 2026.

Revlimid is one of several big products and signals a huge opportunity for the Indian company. As a result of the settlement, all Hatch-Waxman litigation between Sun Pharmaceutical and Celgene regarding the Revlimid patents will be dismissed, the Indian company said in a filing to the stock exchanges.

Several Indian generic players also are in the fray and have struck a deal with Celgene. While such deals crowd the space, it could also result in potential price erosion for Sun Pharma.

As an analyst said, six out of 11 para IV filers have settled the patent litigation case and the majority are expected to enter the market in fiscal year 2023. Natco Pharma (BSE: 524816) and Dr Reddy’s Laboratories (BSE: 500124) are among a few companies that had in the past settled patent litigations over the drug indicated in the treatment of multiple myeloma.

While the US generics business for Sun Pharma has been decent in the past three quarters, the fourth quarter registered a sequential decline. The company said that fourth-quarter of FY20 sales had an exceptional item (one-time business in the USA) and thus the numbers were not strictly comparable.

Another brokerage firm said while the company’s US generics front is going through calibrated product rationalization, the specialty segment looks promising due to a robust product pipeline. However, the metamorphic shift from generics to specialty is expected to weigh on US growth in the near term.