Shares of Dr Reddy’s Laboratories were continue under pressure down 4% at Rs 3,358, extending its past two days 18% decline on the BSE, on concerns that the warning letter issued by the USA drug watchdog will impact the company’s new drug approvals. The order of the District Court in DE has come on a suit filed by AstraZeneca, which objected to the Indian company using purple colour for the generic version. “The court shall conduct a telephonic status conference on Thursday, November 12, 2015”, the drugmaker said in the statement.
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“On an average annual basis since 1995, AZ has spent over United States dollars 250 million building its purple brand”, AZ argued.
Dr.Reddy’s said it is “complying with the order of the court and simultaneously evaluating all possible options to resolve the matter at the earliest”.
A DRL official said that the company has initiated talks with its United States counterparts and may submit a report to the court as directed.
Nexium and generic version had sales of approximately United States dollars 5.2 billion in the USA for most of recent 12 months ending in July, 2015.
“The district court of DE, US, granted a temporary restraining order with immediate effect on sales, delivery, transfer, or other disposition of its generic esomeprazole product in the US market”, the company said in a statement.
Both stocks extended losses for the second consecutive day as US FDA warning letter to Sun Pharma on its Halol facility and worries of similar actions at other drug makers weighed on the stocks.
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DRl launched Nexium in September after weeks of delay, as it had to shift production to a different plant after the US Food and Drug Administration found quality control lapses at the original site.
