Thanks Treasure. Was just reading through old fonda stuff and this article came up. 2 brokers reports on dr R have not mentioned Fonda. The earnings call did not mention fonda either but some interesting comments on expanding gross margin.
Dr Reddy’s gets Fonda nod, sees less competition Thursday, 14 July 2011 - 2:22am IST | Place: Hyderabad | Agency: DNA
KV Ramana
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With the complexity in the process likely to pose as an entry barrier to other me-too companies, pharmaceutical major Dr Reddy’s Laboratories is all set to tap yet another limited competition opportunity in the form of generic Arixtra (fondaparinux sodium).
With the complexity in the process likely to pose as an entry barrier to other me-too companies, pharmaceutical major Dr Reddy’s Laboratories is all set to tap yet another limited competition opportunity in the form of generic Arixtra (fondaparinux sodium).
Dr Reddy’s Laboratories, which has joined hands with Brisbane, Australia-based Alchemia, has received the US FDA’s final approval of its abbreviated new drug application (ANDA) for fondaparinux sodium injection, a bioequivalent version of Arixtra.
The registered trademark of the Glaxo group, Arixtra, is estimated to have recorded about $340 million in sales in the last fiscal. The approval covers 2.5 mg/ 0.5 mL, 5.0 mg/ 0.4 mL, 7.5 mg/ 0.6 mL and 10 mg/ 0.8 mL doses of the drug in prefilled colour-coded, single-dose syringes with automatic needle safety device. Dr Reddy’s will manufacture fondaparinux under licence using a patented process developed by Alchemia.
The generic version of Arixtra is said to be a complex product involving more than 50 manufacturing stages. It requires large-scale synthesis, which is believed to be a reason for its delayed launch even after the molecule’s discovery in early 1980s.
Dr Reddy’s had submitted its ANDA on fondaparinux to the US FDA in March 2009 and was accepted for review by the FDA in May 2009.
Accordingly, an approval was expected in about six months. However, it took about 26 months for the authorities to give a go-ahead.
“While the approval has been delayed, we note Fonda remains a very complex product and would be a limited competition opportunity for Dr Reddy’s,” Vikas Sonawale and Vineet Agrawal, analysts with brokerage firm Religare, said in their note on Tuesday.
GV Prasad, vice-chairman and CEO of Dr Reddy’s, said, “From a commercial perspective, Dr Reddy’s will promptly execute a phased launch that initially plays to our strengths in select wholesale and retail outlets, and subsequently enhance share over time in the coming quarters to augment the growing annuity of upsides in our North America generics business.”
The US patents on Arixtra expired in 2002, the year before the drug was launched in the US. Alchemia’s process for the synthesis of fondaparinux is covered by a patent estate with two issued patents and two pending applications in the US.
Dr Reddy’s has paid a milestone income of $1.6 million to Alchemia and is its sole marketing partner for Fonda in the US.
“Once the drug is launched, Dr Reddy’s will first recoup about $20 million incurred on development costs. As per the agreement, Alchemia could get up to 60% of profits from Fonda sales, implying a revenue share of 35-40% for the company,” the Religare note said. In July 2010, Dr Reddy’s entered into an extended agreement which included marketing rights for Europe.
Pete Smith, CEO of Alchemia, said, “This collaboration has succeeded due to the expertise, dedication, and close communication between the teams at both companies. This approval is a major milestone for Alchemia, fondaparinux representing a significant source of potential future income for the company.”
ACL Price at posting:
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