Feb. 16 (Bloomberg) -- Sun Pharmaceutical Industries Ltd., the most profitable generic drugmaker, headed for its biggest drop in about three months after Pfizer Inc.’s Wyeth unit filed a suit claiming $960 million in damages from the Indian company.
Sun fell 2.8 percent to 541.15 rupees, poised for its steepest fall since Nov. 16, after declining as much as 3.9 percent at 11:40 a.m. in Mumbai. The stock was the biggest loser in the 19-company BSE Healthcare Index.
Sun and Teva Pharmaceutical Industries Ltd. began selling copies of Wyeth’s anti-acidity medicine before a patent dispute could be resolved. The Mumbai-based company sold the drug from Jan. 2008 till it was ordered to stop sales by a U.S. federal court in April 2010. Wyeth’s court filing this week includes sales lost due to Sun’s entry in the market, litigation costs and other damages relating to Protonix, said Souvik Chatterjee, an analyst at SMC Global Securities Ltd.
All the parties in the litigation will likely “reach an out of court settlement between $400 to $600 million,” Chatterjee, who has an “underperform” rating for the stock, wrote in a note to clients today. “We are of the opinion that any penalty for Protonix sales will adversely impact Sun Pharma earnings in fiscal 2013.”
Protonix sales reached $1.9 billion in 2007, and then fell 58 percent in 2008, after Teva Pharmaceutical Industries Ltd. began selling its generic version. Sun entered the market in January 2008, a month after Teva.
Wyeth’s has stated that Teva may be liable for some of the damages, Sun said in its statement.
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