Ranbaxy’s drug Diovan's delay trims Novartis’ losses

NEW DELHI: Swiss innovator drug firm Novartis said on Wednesday that the company expects to lose $2.7 billion to generic competition this year, 23 per cent less than its own estimate in January, mainly due to continued absence of Ranbaxy’s generic version of blockbuster drug Diovan. The Swiss drugmaker went a step further to predict that the generic competition is unlikely to arrive in the third quarter (July-September 2013) for its blood pressure lowering bestseller.

A Ranbaxy spokesperson refused comment on the matter.

“We have raised our outlook for 2013 performance to reflect a smaller impact from generic competition, now expected to be up to $2.7 billion compared to the assumption of $3.5 billion in January,” a Novartis statement said. The reduction is mainly due to the absence of generic competition for Diovan monotherapy in the US, and due to our expectation that this absence is likely to continue in the third quarter, the company statement added.

Ranbaxy, which holds 180-day exclusivity for the generic version of the drug, was originally schedule to launch the drug in the US market in September 2012. It has been over 10 months since then, but its generic Diovan is yet to be launched. In a recent interaction with ET, Ranbaxy’s chief executive officer Arun Sawhney said that the first to file opportunity is safe with the company but didn’t comment on the timing of the launch.

According to an estimate of Novartis management earlier this year, ‘every month of delay is worth about $100 million of sales value’. Meanwhile, patent of a generic Diovan combination drug has expired, and about four to five generic players, including two Indian companies, have already launched lowcost version of the drug in US.

Some analysts reckon here that at least a chunk of Diovan users in the US market would shift to the combination drug, which has cheaper generic alternative offerings today. This means, the initial edge Ranbaxy would have managed, is getting blunted with the delay in launch, as Diovan combo drugs eat into Diovan market.