Disclaimer

All opinions are my own.

Wednesday, April 16, 2008

Ranbaxy, AstraZeneca, Nexium and NEW opportunities

We may not know who is the winner and looser today or in the near future in this settlement of the Nexium deal between Ranbaxy and AstraZeneca. The deal allows AstraZeneca (AZN) to keep its sales of $30 billion for the next five years. However, I believe Ranbaxy had a big win.

In addition, a new way to settle a drug dispute was established.
  1. A generic producer sued and eventually settled with the ethical drug manufacturer of API to produce the API and formulate. They also received benefits of distribution of other drugs. Ranbaxy win.

  2. If AZN did make any payments or concessions to Ranbaxy as part of this settlement, we would eventually come to know. It would be another win for the Ranbaxy.
Would similar settlements happen in the future? The answer would be “why not?”

Ranbaxy is a big winner, as they would have the API and formulation know-how and capabilities. They can optimize their manufacturing processes before the patents expire and keep others a bay.

Teva and Dr. Reddy’s may have been stopped for Nexium but they and other generic companies can use the current resolution model to scout for other opportunities.

How many “genies” have been uncorked by the Nexium deal?