Mumbai: Pharma major Dr Reddys Laboratories will continue to aggressively challenge patents on drugs in the US despite the recent denial of a 180-day marketing exclusivity to its generic Omeprazole 40 mg capsules by the US Food and Drug Administration, Dr Reddys CEO G V Prasad said.

The FDA granted the marketing exclusivity to Andrx group of the US on 16 November. The loss of marketing exclusivity is a setback for Dr Reddys, but this will be temporary. This is to be expected in the game of patent challenges but since generic drugs provide an enormous opportunity, we will continue to aggressively challenge the patents on other drugs, Prasad said.

Omeprazole is indicated for the treatment of duodenal and gastric ulcers, and the size of the market can be gauged from the fact that AstraZeneca, which markets the Omeprazole as Prilosec, had sales of $4 billion in 2000 for Omeprazole alone.

Prasad said the US government provides incentives for companies developing non-infringing versions of patented drugs, whose patent in some cases is active till 2010. The company that files the challenge and proves its case first is given the marketing exclusivity, in which generic drug-makers like Dr Reddys can pull in substantial revenues - like Dr Reddys is doing with fluoxetine 40 mg capsules. In a patent challenge, one does not know whether one is the first to file. In Omeprazoles case, we thought we were the first, he said.

Apart from generic drug challenges, Dr Reddys, which listed on the New York Stock Exchange in April, is also focusing on on-patent generic drugs, innovative drug deliveries and drugs which are difficult to formulate, Prasad said. Nothing can be as profitable as a generic drug, because of the manufacturing cost advantage. In fact, the marketing exclusivity on fluoxetine is the best thing to have happened to Dr Reddys in a very long time. The marketing exclusivity on fluoxetine will be on till February 2002.

Dr Reddys expects substantial growth in its topline in the next few quarters, but there could be no significant change in its bottomline. Despite the Omeprazole setback, Prasad said, Dr Reddys sees the US as the highest growth driver for the next few years. However, the company has also identified Canada, the UK, Germany, Russia and China as the focus areas.

The next generic drug which Dr Reddys hopes to launch in the US is Ciprofloxacin, on which Bayer AG has a patent till December 2003. Other generic drugs in Dr Reddys pipeline are Olanzapine, on which Eli Lilly has a patent, and Ondansetron, on which Glaxo SmithKline Beecham has the patent, but these will be in 2004.

These five countries, besides India, will be our key markets where we are trying to achieving marketing depth, Prasad said. The company is looking at various options, including the acquisition of pharma companies in Europe, especially Germany. We are also planning to have our own marketing set-up in the US, where we currently has a marketing tie-up with Par Pharmaceuticals.