Teva, Ranbaxy to market generic Lipitor
Sales of original Lipitor in US total $7.8 billion for year which ended September 2011. Israeli pharmaceutical giant to gain 180-day exclusivity period which will catapult its sales toward 2011 forecast to $18.4 billion
The sales of original Lipitor, the world's best selling cholesterol lowering drug, amounted to $7.8 billion in the past 12 months. Teva will produce the drug exclusively for Ranbaxy during the 180-day first-to-file exclusivity period Ranbaxy gained in the United States, thus catapulting Teva towards its 2011 sales forecast of $18.4 billion.
Early November, Pfizer announced a 70% markdown on Lipitor in order to better position the company to deal with the forthcoming competition from the generic drug. Yesterday Pfizer's term of patent officially expired.
Naturally, Ranbaxy would rather market the drug by itself and rake in the high profits; however, production problems in its India plant prevent it from doing so.
Furthermore, thanks to the strong distribution channels and economy of scale that Teva brings to the table, being the largest generic drug company in the US, Ranbaxy will be able to maximize its profits from the sales of the drug.
Teva reported in forecasts released right after it publicized its third quarter results that the launch of generic Lipitor will pour $200-$300 million into its cash box within the first month amounting to $1.5 billion within six months, from which it will pay Ranbaxy royalties.
Such revenues may yield Teva a nice profit of up to $300 million during the exclusivity period lasting until May 2012.
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