Dr Reddy's in discussions with Sanofi-Aventis to settle Plavix litigation

Sanofi-Aventis, the world's third-largest pharma company, has disclosed that it has initiated discussions with Dr Reddy's Laboratories for an out of court settlement of the Plavix patent litigation. Sanofi said yesterday that it has entered into an agreement to settle the dispute with US-based Apotex Inc, another challenger to the patent.

Plavix is an anti-thrombosis drug or blood-thinner used in the treatment of acute coronary syndrome or unstable angina and atherothrombosis or stroke. Plavix is one of the largest selling drugs with word-wide sales of more than $6 billion per annum.

The drug was developed by Sanofi-Aventis, which holds the patent, and is marketed in the US by Bristol-Myers Squibb. Sanofi's patent extension for the drug expires in 2011 and four generic companies, Apotex, Dr Reddy's, Teva and Cobalt have challenged the patent extension.

Under the terms of settlement with Sanofi, Apotex would receive the license from Sanofi to launch a generic version of the drug eight months before the expiry of the patent extension. Apotex would pay a royalty to Sanofi for sales during the license period. Apotex would also receive certain unspecified payments, which Sanofi said would be material, on finalisation of the agreement or on termination.

In return, Apotex has agreed not to launch a generic version before the grant of license by Sanofi. The agreement is subject to regulatory and other approvals. The patent case between Sanofi and Apotex in a US court has been put on hold, pending the conclusion of this agreement.

It is expected that if the negotiations between Sanofi and Dr Reddy's were successful, the Indian company would also receive a similar deal involving one-time payments and a license to sell the drug later on.

Dr Reddy's closed at Rs 1,486 (up 9.12 per cent) on the NSE today.