Pfizer Inc. and India's Ranbaxy Laboratories Ltd. agreed to keep copies of the cholesterol pill Lipitor off the U.S. market an extra 20 months, protecting $12 billion in sales for Pfizer.
Under the terms of a lawsuit settlement, Ranbaxy won't sell a generic version of Lipitor, the world's top-selling drug, until November 2011, New York-based Pfizer said Wednesday. Analysts had projected Ranbaxy would enter the market when the main patent expires in March 2010, though Pfizer sued to block it until 2016.
The deal buys Pfizer Chief Executive Jeffrey Kindler time to find drugs to replace as much as $12 billion a year at risk when Lipitor copies reach the market. Investors doubt the former lawyer can offset losses by boosting sales of current products, cutting costs and speeding drug development.
The world's biggest drug maker has lost 32% of its value since Kindler took over in July 2006.
Shares of Pfizer rose 5 cents to $17.77.
Pfizer and Ranbaxy have been fighting in U.S. courts since 2003. Pfizer sued Ranbaxy again in March, this time over patents expiring in 2016 related to the process of making atorvastatin, the active ingredient in Lipitor. Pfizer has another patent on Lipitor that expires in 2017.
The agreement ensures that Ranbaxy can enter the market five years before patents on the process of making Lipitor expire without having to fight the issue in court.
Ranbaxy CEO Malvinder Mohan Singh said the agreement "provides certainty and visibility" to his company's efforts to sell generic Lipitor. Singh said the 2010 proposal "depended on successfully crossing the hurdles posed by Pfizer's other patents that expire in the next eight years."