Shares of Indian pharmaceutical giants Lupin and Zydus Lifesciences came under significant selling pressure on April 16, falling by 3% and 4.5% respectively. The decline followed a ruling by the U.S. District Court in Delaware in favor of Astellas Pharma, the original patent holder of Myrbetriq, a drug used to treat overactive bladder (OAB). The court determined that Lupin and Zydus had infringed upon Astellas’s patent rights, potentially paving the way for the withdrawal of their generic versions from the U.S. market.
Court Ruling Favors Astellas
The dispute centers around the ‘780 patent, which protects the formulation of Mirabegron, the active ingredient in Myrbetriq. Astellas Pharma filed a lawsuit claiming that the generic products manufactured by Lupin and Zydus violated this patent.
The judgment emphasized that the defendants failed to demonstrate that the patent was invalid on grounds such as lack of enablement, inadequate written description, or indefiniteness. With the court upholding the validity of the ‘780 patent, the generics produced by Lupin and Zydus are now under threat of being barred from sale in the U.S.
Financial Implications Loom
Market analysts have raised concerns over the financial impact this legal defeat could have on the Indian pharma companies. Myrbetriq was anticipated to contribute nearly $30 million in quarterly revenues to each company, according to some industry estimates. The ruling could not only impact future earnings but also result in penalties.
Vishal Manchanda, a pharmaceutical sector analyst at Systematix Group, told CNBC-TV18, “We expect a tangible hit to FY26 earnings for both Zydus Life and Lupin due to this development. Moreover, damages and potential penalties, if levied by the jury trial, could further strain their financials.”
The final determination of damages and any remaining disputes over infringement or validity will be taken up in a consolidated jury trial scheduled for 2026.
Companies Respond
In a post-market statement, Zydus Lifesciences acknowledged the verdict and said it is currently reviewing the court order and assessing its implications. “We are evaluating the potential impact of the said order on the operations of the Company and the legal remedies available with the Company,” the statement read.
Both Zydus and Lupin have filed a ‘Motion to Clarify’ in an effort to assert additional arguments regarding the patent’s validity, which the court will consider during the 2026 trial.
Background on Myrbetriq and the Patent Dispute
Myrbetriq, approved by the U.S. Food and Drug Administration in 2012, has been a high-value product in the OAB treatment category, with global sales reaching over a billion dollars annually in recent years. The drug works by relaxing the bladder muscle to increase storage capacity and reduce urinary urgency.
The ‘780 patent, central to the lawsuit, covers specific formulations and the method of administration of Mirabegron. Patent infringement in this context refers to manufacturing or selling a product that falls within the patent’s claim scope without authorization from the patent holder.
The ruling highlights the risks generic manufacturers face when attempting to enter markets dominated by patented medications. It also reaffirms the legal strength of patent protections in the U.S., particularly for high-value pharmaceutical products.
Market Reaction
Investors reacted swiftly to the news, with both Lupin and Zydus Life stocks falling sharply in trading. Analysts believe the market is pricing in not only the potential loss of revenue but also uncertainty around future legal proceedings and penalties.
The verdict serves as a cautionary tale for generics manufacturers and underscores the importance of thorough patent analysis before launching competing products in major markets like the United States.
As the legal battle progresses, the pharmaceutical sector will be closely watching the developments in the run-up to the 2026 trial, which will determine the extent of financial liability and the long-term market prospects for generic versions of Myrbetriq.