Ranbaxy's right to sell a generic version of Pfizer's cholesterol-lowering drug, Lipitor, in the United States for six months has been challenged in a court.
This is considered a $600-million (Rs 2,700 crore) opportunity for the company.
Ranbaxy's shares fell 7 per cent on the Bombay Stock Exchange today.
US-based Mylan Laboratories has sued the US Food and Drug Administration for giving this opportunity to Ranbaxy.
The company wants that all generic players -- including Mylan -- be allowed to enter the market as soon as the patent protection on Lipitor ends in November.
Ranbaxy holds the right as it was the first to challenge a later date patent on the drug and apply for supply of a generic, low-cost version as soon as the basic patent expires.
In a complaint filed on March 18 in a federal court in Washington, Mylan said Ranbaxy was not eligible for marketing exclusivity because of 'false and unreliable data' from its manufacturing site in Paonta Sahib, India, where Lipitor's copies would be produced. The facility was earlier under the FDA scanner for falsifying data.
Mylan said it wrote to FDA in January and February and met officials on February 14 to ask whether Ranbaxy's claim to marketing exclusivity or its application would be rejected because of improper information.
FDA did not answer these questions, Mylan said.
Stock market analysts said a court verdict in favour of Mylan would be a major setback for Ranbaxy. However, they are not clear if Ranbaxy intends to make the drug at the tainted manufacturing facility or some other site.
"It is not known if Ranbaxy has filed an application (Abbreviated New Drug Application) from some other manufacturing facility that is not under the FDA scanner.
In this is so, the case may not stand", said Ranjit Kapadia, vice-president, Institutional Sales, HDFC Securities.
Ranbaxy, while announcing results for 2010 a few weeks ago, projected flat growth next year without considering the potential gain from Lipitor's generic version.
Ranbaxy, 64 per cent owned by Japanese drug major Daiichi Sankyo, declined to comment on the development.
The company has settled all its pending cases with Pfizer on Lipitor. It is yet to receive the final regulatory approval to sell the drug in the US.
Mylan had also announced the settlement of its patent disputes with Pfizer over Lipitor two months ago.
