Is the settlement with Lipitor all done and wrapped up with Pfizer?
Yes, it is. This is a fantastic deal for the consumers in America, Ranbaxy and Pfizer. This is a global settlement that we have reached with Pfizer on Lipitor. This is the largest selling molecule in the world with revenues of USD 12.5 billion globally and over USD 8 billion in America.

We will launch Lipitor generic in the American market in November 2011, risk free with 180-day exclusivity. We will also be launching Caduet, which is Atorvastatin and Amlodipine in combination in the American market in November 2011. We will have 180-days on that.

In addition to this, we will also be launching Lipitor in Canada as an authorised generic for Pfizer. We will be launching this in multiple European markets and Asian markets, including Australia, where we will be launching this product two months in advance of the patent expiry in Europe and 3.5 months prior to patent expiry in Australia. So, it is a very substantial and extremely comprehensive settlement between Ranbaxy and Pfizer.

We would imagine it would have been done at a comprehensive price as well. Take us through that because there is all sorts of numbers doing the rounds and the buzz that one is picking up is that the deal has actually been done in excess of about USD 1.5 billion or at least in that ballpark. Can you share that information with us?
Well, Lipitor is the largest selling molecule in the world with revenues of over USD 12.5 billion. I am not in a position to give you specific financial details. But certainly this is the biggest ever settlement on any product done globally. It is not just for the American market, it is for markets around the world. So, we will be launching this product in Europe, taking it to Canada and we will be getting exclusivity in the US market in Asia and in other markets in the world, including Australia.

It is a very significant and substantial product. There will be huge amounts of revenue and benefits for Ranbaxy and it will also benefit consumers and customers around the world because they will get a generic alternative for certainty earlier than later.

Give us a sense of the payment structure. How is this actually going to accrue to Ranbaxy? Is it going to be an annual payment? How is this going to work out? Over what period of time and whatever the figure is, does it get accrued to Ranbaxy?
We will be getting revenues from the sale of the products in various markets depending on the launch dates, which differ from market-to-market. That is what is going to come into Ranbaxy. We will be getting no money from Pfizer. The money will come by us selling the product in the market and getting profits from that.

This was a litigation between Ranbaxy and Pfizer that has been going on for the last five years across the globe. This is a very positive news for Ranbaxy and our shareholders. It brings in certainty and clear visibility to us. We will be launching this product absolutely risk free in all these markets.

There will be a one-time settlement payment between Pfizer and Ranbaxy and then whatever you go out there and launch and whatever you go out there and sell in terms of Lipitor sales? 
No, there is going to be no payment from Pfizer to Ranbaxy. But we have settled the litigation and withdrawn lawsuits against each other. We have got licences from Pfizer to put this product as a generic in the American market in November 2011 and also in various other markets on predefined dates, which is prior to patent expiry.

We will be able to bring this product to consumers in America, in Europe, in Asia and in Australia prior to the patent expiry of the product and thereby having certainty of launch of that product in that market and also hopefully to get significant market share and revenues in profits for us at Ranbaxy.

Explain the contours of this settlement because if you are saying there is no settlement amount between Pfizer and Ranbaxy, what are the contours or the broad framework really? Do they then source from you? How does it actually work?
We have been challenging them on a series of patents. They had a series of additional backend patents as well. They had patents, which expired in 2010, 2011, 2016 and 2018. We have agreed to launch this product in the American market with a 180-day exclusivity without any risk and without any litigation for sure, for certainty in 2011 in America. So, Ranbaxy will have exclusivity.

We will be the only player who will be putting this product into the American markets and will make significant revenues and profits at that point in time. The American customer gets that product earlier than later for sure in that market place. Similarly, the same thing happens in Canada, across various European markets and across various Asian markets.

The deal with Pfizer is not only for Lipitor. We have also settled litigation on Caduet, which is a USD 400 million product. We will launch as an exclusive player with 180-days in the American market in November 2011. We have also settled our litigation with Pfizer for Quinapril. This is a very comprehensive settlement not only for Lipitor but also for other molecules that we were litigating with Pfizer. So, it really brings all the settlements on these three products with Pfizer to a close.

Are you expecting any kind of anti-trust issues at all because this has been a matter that has been fought in courts across the world? In fact, in the US Federal Court, the 955 patent was upheld in favour of Ranbaxy. Do you expect any kind of anti-trust issues to crop up on account of this?
No, I don't believe they should. We have been extremely careful in the way the deal has structured. We have complied on whatever norms the Federal Trade Commission (FTC) set out. There is no payment between the companies. There are no side-business dealings between the companies. This is clearly a timeframe of agreeing through negotiations to launch at a particular time, which is significantly prior to patent expiry. So, the American consumer gains by having certainty. This is a pro-consumer, pro-competition alliance and agreement between Ranbaxy and Pfizer.

You are saying that if indeed there had been a payment between Ranbaxy and Pfizer, it would have been in contravention of the FTC?
We have just stayed away from all of those aspects. We wanted to make sure that we settle this litigation between the two companies, bring certainty, and remove that sword which was hanging because of the various litigations that were happening and the uncertainty that had created.

But at the same point in time we wanted to ensure that the American customers have accesses to generic Lipitor sooner than later and we believe that having it in November 2011 is certainly a certainty. That is far better than the probability of us winning or losing and therefore having an uncertainty of when that product will eventually come into the market.

Another very critical piece of this entire puzzle is the fact that you still don't have US FDA approval as far as Atorvastatin is concerned. What is the status on that and how do you propose to launch?
We do not have an approval as of now. But as a part of these agreements, Pfizer got licenses, technology transfer and a whole host of things. That will ensure for certainty that we get the approvals and get everything done, so that  we are able to hit the market well in time and leverage a significant opportunity for Ranbaxy.

When do you expect the US FDA approval to come in?
There is no timeline right now but it will certainly happen prior to the launch. We are very certain we will get those and have filed the products. We are the first to file and will get 180-day exclusivity and no other company can come in before us. So, they can only come in after the 180-day launch in America finishes. Only after that will another company enter under any circumstances. We are very certain that we will get the required approvals and will be able to launch a product and get the revenues and profits into Ranbaxy.

Does this settlement need to go through any other regulatory checks and balances or is everything done and sorted out?
We need to file this with the FTC. But we don't need to wait to approval from them. So, the filing will happen but the agreement stands and we have signed this as final.

Has this worked into the numbers and the exorbitant premium that Daiichi Sankyo paid for Ranbaxy? Was this discussed with Daiichi Sankyo before that deal actually got done? 
No, but this is something for which there was clearly an expectation for Ranbaxy to leverage 180-days in the American market at a point in future. I am sure they would have done their own estimations to come and access what the value of this would be. But now there is absolute certainty and it is going to happen. So, there is no probability and there is no risk. It is therefore sure and risk-free without any litigation and concern. There is a defined date and on that date we will be there. 

 Does this not make a possibility of a counter offer even more plausible? 
I don't want to get into speculation on this. There is a clear understanding and agreement that we have with Daiichi Sankyo and Ranbaxy. It is a very significant transformation deal and is a binding deal between the promoters and Daiichi Sankyo.

For the other aspects we will be going to shareholders to take an approval. I believe it is a win-win for Ranbaxy and Daiichi Sankyo. It is a path-breaking deal, which allows an innovated company and a generic company to come together and create a new business model which people in the future are going to follow. That is the way business in the pharma world will be done in the future.

What does this really mean in terms of all the other litigations that you have with the other companies? Is this the preferred route? Are we likely to see a lot more settlements coming in, for instance Aricept, is that on the cards as well?
I had spoken about that in the past and shared a likely time-date of that launch for us, which we will be having 180 days exclusivity on. But for us in terms of Para-4 filings, we will continue to be aggressive and file patent challenges in the US market to leverage our scientific capabilities and have significant returns for our shareholders. We will follow a dual route on each product. We will evaluate whether the settlement is in the best interest of the organization and the American consumer or is it going to be only through litigation.