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Sun Pharmaceutical Industries
Eloxatin: Back to Court, PI Granted to Sanofi
Quick Comment: US District Court has granted
Preliminary Injunction (PI) motion in favour of Sanofi
restraining Sun/CPD from launching generic Eloxatin
(oxaliplatin, $1.2 bln brand sales) in the US market. This
injunction will remain in effect until the court resolves all
issues pertaining to the interpretation of the Settlement
Agreement between Sanofi and Sun. This decision
comes right after the stipulation filed by the two
companies last week which indicated that they were in
discussions to resolve the matter.
How to contextualize this news flow – A rather long
litigation history is behind this product, which appears to
have narrowed down to the outcome of the current court
case – i.e., interpretation of settlement – between Sun
and Sanofi signed in June’09. While Sanofi believes that
Sun should be enjoined from selling oxaliplatin effective
June 30, 2010 (as the case is); Sun believes that it has
wrongly been prohibited from selling the drug (and
should be allowed to enter the market). Whatever the
outcome here, it will likely be appealed by the losing side,
we believe. District and Appeal court resolution could
take 6-8 months, in our view.
Eloxatin = Free Option for Sun – We continue to
believe that Sun’s launch (subject to a favorable court
decision) will likely trigger the launch by other 6-7 ftf (and
now settled with Sanofi) generic players; thereby
significantly diminishing the economics for Sun. Hence,
Sun’s chances of re-entering the market are not high.
Consequently, we have not modeled Eloxatin upside in
our earnings estimates. However, given that Sanofi
stands to lose significant revenues ($1.5 bln to Aug’12),
if Sun does launch the product (subject to a favorable
court decision), its surprising that the two companies
don’t seem to be heading for a (new) settlement.
We retain OW rating on Sun and await the next stock
catalysts – Taxotere, Prandin and Taro integration.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sun Pharmaceutical Industries
Eloxatin: Back to Court, PI Granted to Sanofi
Quick Comment: US District Court has granted
Preliminary Injunction (PI) motion in favour of Sanofi
restraining Sun/CPD from launching generic Eloxatin
(oxaliplatin, $1.2 bln brand sales) in the US market. This
injunction will remain in effect until the court resolves all
issues pertaining to the interpretation of the Settlement
Agreement between Sanofi and Sun. This decision
comes right after the stipulation filed by the two
companies last week which indicated that they were in
discussions to resolve the matter.
How to contextualize this news flow – A rather long
litigation history is behind this product, which appears to
have narrowed down to the outcome of the current court
case – i.e., interpretation of settlement – between Sun
and Sanofi signed in June’09. While Sanofi believes that
Sun should be enjoined from selling oxaliplatin effective
June 30, 2010 (as the case is); Sun believes that it has
wrongly been prohibited from selling the drug (and
should be allowed to enter the market). Whatever the
outcome here, it will likely be appealed by the losing side,
we believe. District and Appeal court resolution could
take 6-8 months, in our view.
Eloxatin = Free Option for Sun – We continue to
believe that Sun’s launch (subject to a favorable court
decision) will likely trigger the launch by other 6-7 ftf (and
now settled with Sanofi) generic players; thereby
significantly diminishing the economics for Sun. Hence,
Sun’s chances of re-entering the market are not high.
Consequently, we have not modeled Eloxatin upside in
our earnings estimates. However, given that Sanofi
stands to lose significant revenues ($1.5 bln to Aug’12),
if Sun does launch the product (subject to a favorable
court decision), its surprising that the two companies
don’t seem to be heading for a (new) settlement.
We retain OW rating on Sun and await the next stock
catalysts – Taxotere, Prandin and Taro integration.
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