Glaxo set to profit from US ruling
Saturday 21 June 1997
The decision grants Toronto-based Genpharm exclusive rights to the huge US ranitidine (generic Zantac) market between 25 July - the day Glaxo's branded Zantac loses its US patent - and August 29th. This will keep hordes of other generic companies out of the market, allowing Glaxo and Genpharm a short, but highly profitable monopoly.
Glaxo, which currently makes pounds 3m a day from US Zantac sales, faced losing 80 per cent of that market when other companies flooded in on July 25th. With only one generic in the market, the Zantac brand price would not fall as far and fast as had been feared. Analysts say Genpharm will want to keep market prices high, as it is being sued by Glaxo for infringing the Zantac patent. Anthony Colletta, analyst at Hoare Govett said: "Genpharm will want to make profits fast. If it loses the case, it will have to pay triple in compensation back to Glaxo."
Though Glaxo said it is "not in a position to evaluate" the effect of the ruling on Zantac sales, it stands to benefit in other ways too. As part of a settlement of disputes over the validity of ranitidine, Glaxo recently signed an agreement, for which it got a reputed pounds 75m, giving another generic group Novopharm the right to sell ranitidine from 10th July, 15 days ahead of the Zantac patent expiry. If the ruling granting Genpharm exclusive rights is upheld and Novopharm is not the first in, Glaxo will have an extra 15 days to sell Zantac unopposed. Novopharm is appealing vigorously against the ruling.
One loser in all this could be Holliday Chemicals, the world's biggest supplier of ranitidine. Though Holliday does supply other groups including Genpharm, its biggest and exclusive licence is with Novopharm. If Novopharm loses the all-important right to be first into the market - which means it can tie up customers at good prices - Hollidays sales would suffer. Holliday's share price has risen steeply on prospects of a huge rise in ranitidine sales. Michael Eastwood from Kleinwort Benson, says that pounds 4m of his pounds 23m 1997 profit forecast for Holliday is on the potential of the US ranitidine market alone. A more serious issue is if Holliday loses a patent infringement case brought by Glaxo against its Spanish subsidiary Uquifa which manufactures rantidine. Should it lose, supplies of ranitidine would dry up and Holliday would suffer. Glaxo, by contrast, would have two years of relatively unopposed Zantac sales.
- 1 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 2 Optical illusion turns blue demon into brunette
- 3 German ethics council calls for incest between siblings to be legalised by Government
- 4 Alwaleed bin Talal: Saudi Prince to donate entire $32bn fortune to charity
- 5 Mystery sea creature - with 'fur' and 'a beak' - washes up on remote Russian beach, baffling scientists
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
Jennifer Garner and Ben Affleck divorce: Memorable quotes from one of Hollywood's most scrutinised couples
German ethics council calls for incest between siblings to be legalised by Government
Alwaleed bin Talal: Saudi Prince to donate entire $32bn fortune to charity
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
They are neither a 'state' nor 'Islamic': Why we shouldn't call them Isis, Isil or IS
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...