Peace on patents to boost Ranbaxy

Ranbaxy expects the settlement with Astrazeneca on Nexium, the world's second largest selling drug with annual global sales of around $5.5 billion, to fetch $1.5 billion in exclusive sale of its generic version and supply of raw materials. The out of court settlement with Pfizer on Lipitor is expected to generate even more revenues in the coming years.

By doing out of court settlements, Ranbaxy has opened multiple revenue streams from these products. Apart from generic clones, it can supply authorized generics as well as bulk drugs to some of these innovator companies.

Settlement of patent litigations, said the source, has brought certainty to the company's cash flows, besides saving it millions of dollars in legal fees. Ranbaxy still has 14 patent challenges going on at the moment. However, the source said, it may not settle all of these out of court.

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