Ranbaxy scrambles for ingredients to make generic Nexium

[March 11, 2014]  By Sumeet Chatterjee and Ben Hirschler

MUMBAI / LONDON (Reuters) — Indian drugmaker Ranbaxy Laboratories Ltd is in talks with at least two companies on sourcing ingredients for a generic version of AstraZeneca Plc's heartburn drug Nexium, a source said, to ensure the pills can be sold in the United States.

The United States banned shipments from one of Ranbaxy's plants in India following an inspection that found poor manufacturing practices, effectively barring India's top drugmaker by revenue from selling drugs in the United States from its India plants.

Ranbaxy's Ohm Laboratories plant in New Jersey is now the only facility that makes generics for the United States.

Any delay in launch of generic Nexium, AstraZeneca's second-biggest seller, will have a big impact on the British company's profit. Nexium had global sales last year of $3.87 billion and U.S. sales of $2.12 billion.

Retaining exclusivity on Nexium in the all-important United States beyond the end of May would not only limit a forecast decline in AstraZeneca's 2014 earnings but could also protect bonuses for top management at the British company.

Ranbaxy's talks with ingredient makers are part of a scramble to ensure it can still be the first to sell a cheaper copy of Nexium in the United States after the drug's patent term ends on May 27, despite regulatory sanctions for production quality.

The source, who has direct knowledge of the matter, declined to give details and refused to be named due to the sensitivity of the issue.

A Ranbaxy spokesman said the company has no comment for now.

Doubts about the ability of India's top drugmaker by revenue to launch the drug grew after the FDA in January prohibited it from shipping to the United States any pharmaceutical ingredient made at its Toansa plant in northern India.

(Additional reporting by Zeba Siddiqui in Mumbai; editing by Anna Willard)

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