US court verdict pushes Dr Reddy's shares down

Last Updated: Fri, Sep 27, 2013 20:41 hrs

Dr Reddy's Labs’ (DRL) scrip on Friday dipped about two per cent following a verdict delivered by a US court that a generic drug manufactured by the the company’s would infringe the innovator's patent.

The United States Court of Appeals for the Federal Circuit ruled that the generic drug would infringe on the patent of Sunovion Pharmaceuticals' insomnia treatment drug Lunesta.

On the BSE, shares of Dr Reddy’s went down to Rs 2,405 from the opening rate of Rs 2,455, down two per cent, and finally closing at Rs 2,411.4, down 1.8 per cent.

Ruling against a New Jersey Court which approved DRL generic, the federal Circuit Court said that the lower court had “erred” in granting summary judgement of non-infringement by DRL.  According to Dainippon Sumitomo Pharma, Lunesta, used to treat insomnia, generated $136 million revenues in North America and Chinese markets in the April-June quarter of the current fiscal.

Sunovin is a wholly-owned subsidiary of Dainippon Sumitomo Pharma Co. Ltd (DSP).

The Osaka-based Dainippon Sumitomo has already reached settlements with other companies over the sleep medicine, including one with Teva Pharmaceuticals.

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