Ranbaxy CEO says Nexium deal extremely positive

By Devidutta Tripathy

NEW DELHI (Reuters) - Ranbaxy Laboratories, India's top drugmaker by sales, said a patent litigation settlement with AstraZeneca Plc over ulcer pill Nexium was extremely positive and the drug would add to its revenue from 2009.

The two companies said on Tuesday that under the deal Ranbaxy would be allowed to start selling a cheap, copycat version of Nexium on May 27, 2014, which marks the expiry of the earliest patents on the medicine.

But Ranbaxy will benefit before that date via an agreement that means it can formulate a portion of AstraZeneca's U.S. supply of Nexium from May 2010, with the active ingredient in the drug, esomeprazole magnesium, being made from May 2009.

"This is certainly going to see value for us as a company. It is extremely positive for us," Ranbaxy chief executive Malvinder Singh told Reuters in an interview.

"It is a very significant and substantial deal... We will get revenue every single year starting in 2009," Singh said.

At 0912 GMT, Ranbaxy shares were up 10.4 percent at 489.50 rupees in a Mumbai market up 2 percent. They rose to a high of 499.80 rupees, their highest since May 2006.

Nexium is the second-biggest prescription medicine globally, with sales of $5.2 billion in 2007. Only Pfizer Inc's blockbuster cholesterol medicine Lipitor, on $12 billion, sells more.

A Ranbaxy statement said it also had two other agreements with AstraZeneca for Omeprazole 40mg, an ulcer pill, and heart drug Felodipine ER.