Sun Pharma’s Caraco acquires Forest Inwood’s product line following Lexapro settlement

Caraco Pharmaceutical Laboratories, a subsidiary of Indian generic firm Sun Pharma, has closed an asset purchase agreement with Forest Laboratories to acquire several products from Forest’s Inwood line of business.

Caraco’s asset purchase agreement is part of the deal the US-based company entered with Forest Labs for the settlement of the legal proceedings related to Lexapro (escitalopram oxalate) tablets.

The patent litigation on  Lexapro (escitalopram oxalate) generic tablets abbreviated ned drug application (ANDA) settlement resolves litigation involving Caraco, Forest, Forest Holdings, Ltd., and H. Lundbeck A/S and Sun Pharmaceutical Industries Limited, Caraco informrd in a press statement.

Following the litigation settlement, Forest has agreed to provide licenses to Caraco for any patents related to Lexapro (escitalopram oxalate) with respect to the marketing of Caraco’s generic version of the product as of the date that any third party generic enters the market with final approval from the FDA other than an authorized generic or the first filer with Hatch-Waxman related exclusivity.

Forest has also reimbursed Caraco for a portion of its attorney’s fees related to this litigation.

Asset purchase agreement enables Caraco to take over the commercialization and sale of several products from Forest’s Inwood business.

Caraco has paid Forest an advance against royalties and will pay royalties on net sales of these products.

In return, Caraco will hold until 2012 at least to launch a generic version of depression and anxiety drug Lexapro. The first of Lexapro’s three patents on Lexapro expires in 2012.

New York-based Forest Laboratories Inc and Dutch patent-holder H. Lundbeck A/S filed a lawsuit gainst Caraco for infringing their patents on Lexapro (escitalopram oxalate) in 2006.

However, Caraco reached a settlement with Forest and Lundbeck in July this year that enable the company to automatically license Caraco’s generic product on the same day that any third party company gains federal approval and enters the generic market.

Recently, Caraco Pharma has entered into a consent decree with the U.S. Food and Drug Administration  regarding the company’s drug manufacturing operations.

The decree provides a series of measures that, when satisfied, will permit Caraco to resume manufacturing and distributing those products that are manufactured in its Detroit area facilities.

Caraco is working expeditiously to satisfy the requirements of the decree and has already retained independent cGMP experts for review of the Company’s operations and to facilitate a successful result, the company announced in a press statement.

Under terms of the consent decree, Caraco’s cessation of manufacturing operations will continue until it receives written notification from independent experts and the FDA that it is in compliance with the decree and regulations and can resume operations.

US marshals, at the request of the FDA, seized drug products manufactured at Caraco’s  facilities in Detroit, Farmington Hills, and Wixom on 25th June. The seizure also includes ingredients held at these same facilities.

Generic drugs seized by federal authorities could cost Detroit-based Caraco Pharmaceuticals an estimated $15 million to $20 million in lost inventory.

The US FDA action was the result of Caraco’s continued failure to meet the FDA’s current Good Manufacturing Practice (cGMP) requirements.

Since January 2009, Caraco has initiated voluntary recalls of drug products to protect the public from potentially defective medications. The recalls involved manufacturing defects, including oversized tablets and possible formulation error.

Detroit-based Caraco Pharmaceutical Laboratories, Ltd., develops, manufactures, markets and distributes generic and private-label pharmaceuticals to wholesalers, distributors, drugstore chains and managed care providers.