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Novartis shares hit one-year low after patent ruling

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(Globalpost/GlobalPost)

Shares in Novartis' Indian unit plunged to a 14-month low on Monday, while rivals climbed after the Supreme Court rejected the Swiss firm's patent bid for a cancer drug.

Novartis fought for seven years to gain patent protection for an updated version of its blockbuster drug Glivec, but activists say the court's rejection will protect access to cheap generic versions in developing nations.

Novartis shares slumped 6.8 percent to 558.10 rupees at the Bombay Stock Exchange -- its lowest since January last year -- after the ruling, before recovering marginally to 572.95 rupees.

The judgment was seen as a boost for Indian drug giants such as Dr Reddy's, Cipla, Ranbaxy Laboratories and Natco Pharma, which make cheaper generic versions of Glivec.

Cipla rose 2.63 percent to 389.0 rupees while Natco jumped as much as 10.72 percent to 475.05 rupees. Dr Reddy's was up 2.64 percent at 1,813.00.

Top drug maker Ranbaxy rose 2.77 percent to a high of 452.7 rupees.

Ranveer Singh, a pharmaceutical analyst with Mumbai brokerage Sharekhan, said the ruling would "help remove the hangover of uncertainty surrounding patent rules in India".

While the decision was viewed as a negative one for multinational firms, "they will have more clarity on Indian patent laws", Singh added.

Novartis argued that the updated Glivec was a significant improvement because it is more easily absorbed by the body.

But in a ruling that went to the heart of patent law in India, known as the "pharmacy to the world", the top court said the compound "did not satisfy the test of novelty or inventiveness" required by the country's legislation.

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http://www.globalpost.com/dispatch/news/afp/130401/novartis-shares-hit-one-year-low-after-patent-ruling