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Indian pharma major Ranbaxy has settled the patent dispute with GSK on Valacyclovir, according to sources. Malvinder M Singh , CEO and MD of Ranbaxy Laboratories has confirmed the news that the company will launch Valtrex with a 180-day exclusivity in late 2009. The drug is estimated to be worth USD 1.5 billion by mid-2009, he added. Margins via Valtrex would be substantial, Singh said.

 

Excerpts of CNBC-TV18's exclusive interview with Malvinder Singh:

 

Q: What does the settling of this dispute entail for you?

 

A: I think this is a very significant STF opportunity that we have.

 

We have twenty such opportunities which are valued at over USD 26 billion at innovative prices. This product today is a USD1.3 billion drug and if it continues to grow the way it is, by mid to late-2009, it would be over USD1.5 billion.

 

We had a first-to-file on this; we were in litigation with Glaxo SmithKline . So, now the settlement brings in certainty on both sides, it really takes out all the litigation on this product. We will be launching this product with a 180-day exclusivity in late-2009; we will get 180 days from that point in time.

 

Q: Given the size of the market, what could be a reasonable estimate assuming a certain market share for you in revenue terms once you launch for that six-month period?

 

A: From our viewpoint, I think this is a significant opportunity. We will and we are very well positioned to capitalize on this in a very substantial manner. However, I am not able to talk on some of the specifics at this point in time.

 

But, I think keeping a USD 1.5 billion product in late 2009, and keeping some of the other trends of what successes have been on the first-to-file basis, all I can say is that it's a very significant opportunity for the company for the shareholders in 2009.

 

Q: Being an authorized generic, what kind of margins would you been working on for this product or would it be a low margin opportunity?

 

A: This is not an authorized generic, this is a first to file product where we will have our own product in the market and we will get 180 days on that. So for this, our margins would be very substantial.

 

Q: I believe there might be some lump sum payment involved as well, can you confirm that for us and what region it might be around?

 

A: I am not able to share some of the specifics of the deal in terms of the way the deal is structured because of confidentiality reasons. But what can I share with you is, had we continued to litigate, there would have been an openness and uncertainty on both sides. And I think one of the key objectives of really coming to an out-of-court settlement was to bring certainty on both sides.

 

Even when we had spoken last, around ten days ago, at the quarterly results, I had shared that we were looking at one-first-to file product in 2008 and also in 2009. This is the one I was talking about for 2009 that we had said - there would be one product and there is a significant upside for the company.

 

We will at some point, hopefully, share with you the one for 2008 as well

 

Q: We do have some estimates though that indicated - that might be about USD 400 million in the exclusivity period. Would that be a fair assumption that you would say?

 

A: I think the opportunity is large. If you look at the market and if you look at it from a USD 1.5 billion product, I think whatever we have done with our first to files has always indicated that we have been the market leader, we have taken a very strong position.

 

I think this will be far better than any of the other first-to-files we have had, in terms of our success. We have the approval, it is a certain product and everything is ready, we are just waiting to launch it in late-2009, as per the terms of our agreement. So I think it would be a significant and a substantial opportunity with a very high profit margin for us.

 

Q: Just one final confirmation, at this point there is no other authorized generic play of Valtrex?

 

A: This is a branded product, there is no authorized generic at this point in time.