Posted by: Bruce Einhorn on December 12, 2007
Barely a month goes by without news of a big multinational drugmaker suing an upstart Indian rival company for patent infringement. Big Pharma companies worried about threats from generics makers in India have been turning to U.S. courts for relief, so I guess investors weren’t too surprised to hear that Mumbai-based Glenmark Pharmaceuticals is the defendant in a new lawsuit brought by Sanofi-Aventis and Abbott Laboratories. Generics makers – not just in India but in Israel, the U.S. and Europe – argue that they’re not doing anything wrong and the Big Pharma companies are playing games in order to extend the lives of their patents and squeeze more profits out of their high-priced drugs.
Investors seem to be buying that argument in the case of Glenmark. At least, they don’t seem all that concerned, as they greeted the news of the lawsuit with a shrug. Glenmark’s stock price is trading just shy of the 52-week high it hit yesterday and the shares are up 79% this year, compared to a 47% rise for the Sensex index. Sure, there’s a new lawsuit. But Glenmark’s profits are up (87% in the last quarter), the company in October announced a partnership with Eli Lilly, and Glenmark and partner Forest Laboratories in October also won FDA approval to start clinical trials for an asthma drug. As Indian pharma companies like Glenmark increase their profile globally, they’re getting hit by more and more lawsuits from the big Western drug companies. There’s no avoiding that. At least for now, though, investors are betting that litigation won’t slow the company’s progress.