The strategy of the Hyderabad-based pharma major Dr Reddy's Laboratories' (DRL) to approach the US market with a series of gambles rather than on one major upside is paying dividends.
The company is one of four to have entered the world's biggest pharmaceuticals market with the generic version of Starlix (Nateglinide) for the treatment of Type 2 diabetes. Novartis Pharmaceuticals Corporation, Canada, is the innovator of this drug.
"We received the approval on September 9 and we have already launched it," a Dr Reddy's spokesman told pharmaquest.biz. He did not divulge expected revenues from the drug.
However, industry sources said Novartis was racking up about $120-150 million sales annually.
Nateglinide was approved by the FDA in December 2000 as a treatment for Type 2 diabetes.
For Dr Reddy's, the Starlix generic presents yet another limited-competition opportunity thrown up by its gamble of Para IV filings.
It was one of the 4-5 drugmakers to first file Para IV application for the Starlix generic.But since Dr Reddy's did not get a tentative approval within the stipulated 30 months of filing, the company had forfeited its 180-day exclusivity.
Analysts said the exclusivity would remain, apart from Dr Reddy's, with the four players including the New York-based Par Pharmaceutical, Israel's Teva and California, US-based Watson Pharmaceuticals.
While Watson is expected to get approval shortly, Dr Reddy's was the first to launch the product.
Prashant Nair and Akshay Rai, analysts with Citigroup Global Markets, said the Starlix opportunity would contribute about $8-10 million to Dr Reddy's net profit during the exclusivity period.
"DRL and Teva appear to be the only fully integrated players (having their own own active pharmaceutical ingredient), implying better cost and sourcing ability. This, along with the fact that it has launched ahead of others, is likely to help Dr Reddy's gain a reasonable share of the market," Nair and Rai said in a note.