Holliday cashes in on Glaxo's misery

While Glaxo Wellcome is facing sleepless nights following the patent expiry of Zantac, its blockbuster ulcer drug, in the US, Holliday Chemicals, which makes the generic version of Zantac, is cashing in. Shares in the company soared 15 per cent to 176.5p yesterday after the company announced a 64 per cent jump in profits to pounds 13m, boosted by a pounds 4m contribution from supplying generic Zantac, called ranitidine, into the US market.

Mark Robbins, joint chief executive, said generic companies in the US had been buying in large quantities of ranitidine in readiness for the Glaxo patent expiry in July. Holliday is one of the biggest suppliers of the drug into the US, supplying most of the generic players, including Novopharm, Geneva and Genpharm. "Ranitidine is definitely a boost to us. It is a huge market in the US," he said.

Mr Robbins denied that acourt case brought by Glaxo, which claims Holliday's Spanish subsidiary, Uquifa, is infringing its Zantac patent and could threaten to halt the supply of ranitidine into the US, was an issue.

Mr Robbins said a complex litigation process which resulted in only one generic company, Novopharm, having the right to sell ranitidine until the end of August was benefiting the group, though the outlook depended on how many generics entered the market: "The fewer players there are, the better for us. Generic drugs are price-sensitive. If there are 15 players in the market, the price could fall by 90 per cent."