Dr. Reddy’s Laboratories (RDY) recently announced that it has entered into a settlement agreement with Pfizer Inc. (PFE) to resolve the litigation related to Lipitor (10 mg, 20 mg, 40 mg, and 80 mg), generically known as atorvastatin calcium tablets.
Pfizer’s cholesterol drug Lipitor, is set to lose patent protection in November 2011.
Recently, Dr. Reddy’s has been in the limelight quite a few times. In July, the company entered into an agreement with India based JB Chemicals & Pharmaceuticals to acquire the latter’s pharmaceutical prescription portfolio in Russia and other CIS (Commonwealth of Independent States) regions for about $34.85 million. The companies also entered into a supply agreement, under which JB Chemicals will manufacture and supply the acquired products to Dr. Reddy’s.
Additionally, in July, the US Food and Drug Administration (FDA) approved fondaparinux sodium injection, the company’s bioequivalent generic version of Arixtra. The drug is currently marketed by GlaxoSmithKline plc (GSK) for preventing deep vein thrombosis (DVT) in adults who are undergoing hip fracture, hip replacement, or knee replacement surgery. Also during the same month, Dr. Reddy’s announced the US launch of generic version of Novartis AG’s (NVS) blood pressure drug, Lotrel.
Further, in June, Dr Reddy’s had announced the US launch of its generic version of Johnson & Johnson’s (JNJ) antibiotic drug, Levaquin. Moreover, the company announced the launch of three generic products in the US in June. Dr Reddy’s launched the generic versions of Pfizer’s anti-depressant, Effexor XR, Eisai Co. Ltd.’s Alzheimer’s treatment, Aricept, and Novartis’breast cancer treatment, Femara. We believe that the launch of these generic drugs will bring in additional revenues for Dr. Reddy’s Global Generics segment, which recorded sales of $1.2 billion in fiscal 2011, reflecting a year-over-year increase of 10%.
We currently have an Underperform recommendation on Dr. Reddy’s. The stock carries a Zacks #5 Rank (Strong Sell rating) in the short run.