Tag Archives: outlicensing


IP Issues that concern generic pharma companies generally center on ANDA filing, Patent Litigation, Patent Outlicensing and Brand Acquisitions. It has been very rare for an Indian generic player to be involved into all the four aspects in a single case involving a common drug molecule. One such case with India headquartered Sun Pharma as the ANDA Filer and Key Litigator has been taken as the subject matter for the current study.

Sun Pharmaceuticals Ltd, a leading India-based global pharmaceutical company with interests in the cardiology, psychiatry, neurology, gastroenterology, diabetology and respiratory disease segments has been very active in building and enforcing an exhaustive patent portfolio. Sun has also been one of the early Indian players to take on with the Big Pharma on issues of ANDA Para IV and gaining exclusive marketing rights into US geographies.

Facts of the Case

As a part of its global business strategy Sun acquired US-based Caraco Pharmaceutical Laboratories in 1996. In March 2006, Caraco filed an Abbreviated New Drug Application (ANDA No. 78-219) with FDA seeking a generic approval for escitalopram oxalate in March 2006. Escitalopram is an antidepressant of the selective serotonin reuptake inhibitor (SSRI) class. It is indicated for adults with major depressive disorder, generalized anxiety disorder, social anxiety disorder, or panic disorder and was developed by Danish pharmaceutical firm Lundbeck. Forest Laboratories, which also co-developed the molecule with Lundbeck, was assigned the exclusive license to manufacture and market the escitalopram oxalate based commercial brand, Lexapro.


In reply to Caraco’s ANDA application, Lundbeck and Forest Labs jointly initiated a legal action against Caraco and on July 10, 2006 filed a patent infringement lawsuit at United States District Court Eastern District of Michigan alleging that Caraco’s ANDA products would infringe their patents covering escitalopram. The Orange Book lists three patents – US 6916941, US 7420069, and RE34712 – for escitalopram and Lundbeck’s and Forest’s assertion was that Caraco has to prove that its product would not infringe any of its 3 patents.

On February 20, 2007, Caraco filed a declaratory judgment action against Forest and Lundbeck seeking a declaration that Caraco’s ANDA Products will not infringe the ‘069 and the ‘941 patent.

Out-of-Court Settlement

Before the court could decide on the matter, the three companies reached a mutually agreed settlement in July 2009. The major provisions under this settlement were:

  • Sun Pharma would give a global license to Lundbeck for the former’s patent applications related to escitalopram in return to a one-time upfront payment and if the Sun’s technology is used in any marketed product by Lundbeck, a royalty on sales would also be paid to Sun.
  • Forest would provide licenses to Caraco for any patents related to Lexapro and with respect to the marketing of Caraco’s generic version of the product as of the date that any third party generic that has received final approval from the FDA enters the market other than an authorized generic or the first filer with Hatch-Waxman related exclusivity.
  • Caraco would take over the commercialization and sales of several products from Forest’s Inwood business. Caraco would pay Forest an undisclosed advance against royalties and royalties on net sales of these products.
  • Forest would reimburse Caraco for a portion of their costs related to this litigation.


The terms and conditions for the settlement clearly indicate that the innovator companies could foresee the impact that the litigation could have on their revenues and goodwill. It also signifies the growing clout of mid level generic players who are now getting into a position to dictate their terms and conditions and getting an upper hand during such settlements. In the current case, Sun Pharma, through its US Subsidiary, Caraco Pharma Lab, was not only able to avoid a huge litigation cost but, through licensing and commercializing clauses, made the most out of the situation.

Conclusively, IP Litigation can not be taken to separate from other Business related Strategy. As is established from the current case, a sound strategy during following up an ANDA litigation can bring benefits for the Company that might not be exactly from the IP realm but goes much beyond it to cover Product and Brand Acquisition.

Latest Developments

  • In October 2009, Caraco closed an asset purchase agreement with Forest Laboratories to acquire several products from Forest’s Inwood line of business.
  • Sun Pharma received a one-time receipt of US $20mn from Forest Lab as a part of the Lexapro settlement.

About the Author: Mr. Abhishek Sahay, a Senior Patent Consultant in Institute of Intellectual Property Research & Development (IIPRD) and can be reached:  abhishek@iiprd.com.

Indian Pharmaceutical Industry Licensing Deals: Case Studies

  • Glenmark Pharmaceuticals

Glenmark, research-driven, global, integrated pharmaceutical company with Research Focus on Inflammatory Diseases, Metabolic Disorders and Pain has a presence in over 80 countries around the world.

The Company has a proven track record of entering into Licensing deals with Big Pharma and entered into Outlicensing deals in 2004 with Forest laboratories for Oglemilast, a drug that was potentially indicated for chronic obstructive pulmonary disorder (COPD) and asthma and was still in the Development Phase at the time of entering into the deal. The potential value of the deal was $ 190 million in US. Glenmark later entered into an agreement with Teijin Pharma Ltd in Japan for the same molecule where the deal value was $53 million. Till date, Glenmark has received $35 million from Forest and $6 million from Teijin.

In a case of In-licensing, Glenmark announced in 2005 a collaborative agreement with Napo Pharmaceuticals for Napo’s proprietary molecule Crofelemer, indicated for four distinct disease categories. Glenmark has Crofelemer rights for diarrhea Indications in 140 Countries. Currently the drug is into the Phase 3 trial and the product launch is expected to happen sometime in mid-2010.

Glenmark entered into an outlicensing agreement with Merck in 2006 for Melogliptin, an anti diabetes target. Glenmark received $ 31 million as upfront payment for the same. But, in an unfortunate development Merck decided to drop off the agreement due to a shift from the focus on anti diabetes segment (2008). Currently, Glenmark is developing the drug on its own and have completed the Phase IIb trials.

In 2007, Glenmark’s in-house developed molecule for a potential treatment of pain was outlicensed to Eli Lilly for an upfront payment of $ 45 million. Only a year after the deal, work on the clinical trial of the molecule was stalled. Both Glenmark & Eli Lilly are currently working on the way forward on the molecule.

Despite suffering setbacks from 2 out of 3 key licensing deals, spirits at Glenmark are high, courtesy the success it is enjoying in the Generics segment. Only last week, Glenmark Generics ltd, was able to ink 3 key agreements that has not only strengthened its position in the global generics market but also established Glenmark as an aggressive player that knows how to make maximum from an opportunity.

Following two patent law suits filed by Glenmark, Medicis Pharmaceutical came to an agreement with Glenmark to let the latter launch the former’s dermatological product Vanos in 2013, long before the patent is set to expire in 2023. In a separate arrangement, Glenmark and Medicis have agreed to jointly develop a product from the former’s pipeline to treat acne. Glenmark is to receive an upfront of $5 million from Medicis. Apart from this, Glenmark had entered into a licensing deal with Sanofi-Aventis for the development and commercialization of novel molecules to treat chronic pain. It has also announced a licensing deal with Par Pharmaceutical to market Ezetimibe tablets.

Very clearly, Glenmark’s business model involve a lot of in-licensing and out-licensing arrangements and the Company wish to ride upon the success of such deals to project itself as an innovation driven global pharmaceutical player. Add to it the rapidly rising of clout of Glenmark in Generics space and its deal-signing spree with pharma majors and it is not difficult to understand on why Glenmark is set to make its mark in the Global Pharmaceutical domain.

  • Dr Reddy’s Laboratories

Dr Reddy’s has been a frontrunner in many aspects of the Indian Pharmaceutical Industry Growth Story that has been witnessed by the globe. Licensing is one of such aspect. In fact, even during the times when India had just opened its gate to a global economy, Dr Reddy’s had inked its first Outlicensing deal.

In 1997, an in-house developed anti-diabetic molecule, DRF 2593 (Balaglitazone), was licensed to Novo Nordisk. In fact, with this deal Reddy’s became the first Indian pharmaceutical company to out-license an original molecule. But, late in 2004, after phase II studies, Novo Nordisk decided to terminate further clinical development of balaglitazone, as the phase II results did not suggest a sufficient competitive advantage for balaglitazone compared to existing products. Post this development, Dr Reddy’s entered into an agreement with Rheoscience for Balaglitazone (DRF 2593). As on January 2010, Blaglitazone (DRF 2593) Phase III clinical trials were announced.

A year later, Dr Reddy’s licensed another anti-diabetic molecule, DRF 2725 (Ragaglitazar), to Novo Nordisk. In 2003, Novo Nordisk, which had suspended trials on Ragaglitazar in 1999 on finding tumors in long-term animal studies, decided to terminate further trials on the molecule completely.

In 2001, Dr Reddy’s Out-licensed DRF 4158, a potential dual-acting insulin sensitizer, to Novartis for an upfront payment of US $55 million. Later in 2003, Novartis decided to discontinue working on DRF 4158, but continued collaborating with Reddy’s for additional development compound that is a dual-acting insulin sensitizer.

Despite a low success rate from its licensing deals, Dr Reddy’s went ahead with one of its molecule and despite criticism from its original licensing partner, Reddy’s now have successfully completed Phase III trials of the same molecule. This clearly depicts the conviction and faith in one’s abilities that Dr Reddy’s has demonstrated for its first in-house developed drug molecule. This in itself stands as a testimony to Dr Reddy’s capabilities to mark new beginnings for Indian Pharma Sector.

About the Author: Mr. Abhishek Sahay is a Senior Patent Consultant at Institute of Intellectual Property Research & Development (IIPRD). Currently, He is working on Patent Licensing Issues in the Life Sciences domain and some of his success stories can be found at http://iiprd.com. He can be reached at abhishek@iiprd.com.