CNBC: There will be a one-time settlement payment between Pfizer and Ranbaxy and then whatever you go out there and launch and whatever you go out there and sell in terms of Lipitor sales? Singh: No, there is going to be no payment from Pfizer to Ranbaxy. But we have settled the litigation and withdrawn lawsuits against each other. We have got licences from Pfizer to put this product as a generic in the American market in November 2011 and also in various other markets on predefined dates, which is prior to patent expiry.
CNBC: Explain the contours of this settlement because if you are saying there is no settlement amount between Pfizer and Ranbaxy, what are the contours or the broad framework really? Singh: We have been challenging them on a series of patents. They had a series of additional backend patents as well. They had patents, which expired in 2010, 2011, 2016 and 2018. We have agreed to launch this product in the American market with a 180-day exclusivity without any risk and without any litigation for sure, for certainty in 2011 in America. So, Ranbaxy will have exclusivity.
We will be the only player who will be putting this product into the American markets and will make significant revenues and profits at that point in time. The American customer gets that product earlier than later for sure in that market place.
CNBC: Are you expecting any kind of antitrust issues at all because this has been a matter that has been fought in courts across the world? Singh: No, I don't believe they should. We have been extremely careful in the way the deal has structured. We have complied on whatever norms the Federal Trade Commission set out. There is no payment between the companies. There are no side-business dealings between the companies. This is clearly a timeframe of agreeing through negotiations to launch at a particular time, which is significantly prior to patent expiry. So, the American consumer gains by having certainty. This is a pro-consumer, pro-competition alliance and agreement between Ranbaxy and Pfizer.
CNBC: You are saying that if indeed there had been a payment between Ranbaxy and Pfizer, it would have been in contravention of the FTC? Singh: We have just stayed away from all of those aspects. We wanted to make sure that we settle this litigation between the two companies, bring certainty, and remove that sword which was hanging because of the various litigations that were happening and the uncertainty that had created.
But at the same point in time we wanted to ensure that the American customers have accesses to generic Lipitor sooner than later and we believe that having it in November 2011 is certainly a certainty. That is far better than the probability of us winning or losing and therefore having an uncertainty of when that product will eventually come into the market.
CNBC: Another very critical piece of this entire puzzle is the fact that you still don't have US FDA approval as far as Atorvastatin is concerned. What is the status on that and how do you propose to launch? Singh: We do not have an approval as of now. But as a part of these agreements, Pfizer got licenses, technology transfer and a whole host of things. That will ensure for certainty that we get the approvals and get everything done, so that we are able to hit the market well in time and leverage a significant opportunity for Ranbaxy...There is no timeline right now but it will certainly happen prior to the launch.
CNBC: Has this worked into the numbers and the exorbitant premium that Daiichi Sankyo paid for Ranbaxy? Was this discussed with Daiichi Sankyo before that deal actually got done? Singh: No, but this is something for which there was clearly an expectation for Ranbaxy to leverage 180-days in the American market at a point in future. I am sure they would have done their own estimations to come and access what the value of this would be. But now there is absolute certainty and it is going to happen. So, there is no probability and there is no risk.
CNBC: Does this not make a possibility of a counter offer even more plausible? Singh: I don't want to get into speculation on this. There is a clear understanding and agreement that we have with Daiichi Sankyo and Ranbaxy. It is a very significant transformation deal and is a binding deal between the promoters and Daiichi Sankyo...It is a path-breaking deal, which allows an innovated company and a generic company to come together and create a new business model which people in the future are going to follow. That is the way business in the pharma world will be done in the future.