Dr Reddy’s gets $22.5 million claim money from Canadian drug maker Nordion Inc

HYDERABAD: Dr Reddy’s Laboratories Ltd ( DRL) has received $22.5 million from the Canadian pharmaceutical firm Nordion Inc against $80m that the Indian drug maker has claimed as damages from the Ottawa headquartered contract research organization (CRO).

The Indian firm had sued the Canadian company, formerly known as MDS Inc, in April 2009 seeking damages sustained by it owing to an alleged breach by the CRO. The breach pertains to the laboratory services agreement related to bio-equivalency studies that the CRO was to offer to support Dr Reddy’s regulatory applications for generic drug approvals.

In a statement on late Friday, Dr Reddy’s said the case arose after the USFDA cited MDS with violations of good laboratory practices that caused the regulator not to accept MDS’s laboratory reports performed during 2000-2004. The Indian drug maker claimed damages from the Canadian firm for the losses it suffered due to services availed from January 1, 2000 to December 31, 2004.

Nordion Inc in a statement said the settlement amounts are being paid with the help insurance coverage. “The settlement is expected to result in a loss of US$1.4 million for the company after taking into account financial reserves maintained by the company in relation to the claim. The settlement, most of which is covered by insurance, will result in a net cash outflow of US$17 million that includes insurance proceeds received to date.”