Newspaper: The Hindu Business Line
Section: Corporate
Date: 30th July, 2010
Page: 5

US court rules Gemzar patent invalid, says Sun

Our Bureau
Mumbai, July 29
Sun Pharma said that the US Court of Appeals for the Federal Circuit upheld an earlier judgment by another court against Eli Lily – stating that certain claims made by Lilly on its cancer drug Gemzar were invalid.

Gemzar is a registered trademark of Eli Lilly and Co and the US Appeals Court affirmed the judgment of the US District Court for the Eastern District of Michigan against Eli Lily, finding certain claims of US Patent No 5,464,826 invalid, a note from Sun said.

The appeal arose out of a lawsuit that Eli Lilly filed against Sun Pharma in connection with Sun's submission of an Abbreviated New Drug Application (ANDA) for a generic version of Gemzar. The ANDA, if approved by the US regulator, would allow Sun to make and sell gemcitabine, the generic similar version of Gemzar, in the US.

In the Michigan lawsuit, Eli Lilly had said that Sun Pharma's ANDA infringed certain claims from the
5,464,826 patent and US Patent No 4,808,614 that describe gemcitabine and its uses, the active ingredient in Gemzar, a note from Sun said.

Earlier, the Michigan District Court had ruled against Eli Lily stating that the asserted claims of the 5,464,826 patent were invalid for obviousness. The Appeals Court agreed with the ruling of the District Court, and noted that the Michigan Court had correctly followed the Federal Circuit's precedent regarding double patenting.

The '826 patent, now ruled invalid, would have expired on November 7, 2012, and would have had pediatric exclusivity through May 7, 2013. The '614 patent, not part of the appeal, expired on May 15, 2010, but has pediatric exclusivity through November 15, 2010, Sun said.

Newspaper: The Financial Chronicle
Section: My Brands
Date: 30th July, 2010
Page: 7

Sun wins patent case against Eli

By PTI & Kumar Shankar Roy Jul 29 2010 , New Delhi/Bangalore
Tags: News

The US Court of Appeals for the Federal Circuit has affirmed a lower court's finding that one of Eli Lilly & Co.'s patents for cancer drug Gemzar is invalid for double-patenting. This comes as a shot in the arm for India's largest drug-maker by market value, Sun Pharmaceutical, which wants to make a generic version of the drug that reported global sales of over $1 billion in 2009.

Sun Pharma, though not a first filer for this product, triggered the successful patent challenge against Lilly's 6th largest product. Eli Lilly has several patent infringement cases currently pending against generics who want to offer their own versions of gemcitabine like Teva, Hospira and Novartis's Sandoz unit. Gemcitabine is the active ingredient in Gemzar, which is approved to treat cancers of lungs, pancreas and breast cancer.

The appeals court on Wednesday upheld the ruling by Judge George Caram Steeh of the US District Court for the Eastern District of Michigan delivered in August 2009 that US Patent '826 was invalid for “obviousness-type double-patenting”.

The Federal Circuit Court ruled that the '826 patent was invalid because it repeated a method of using Gemzar to treat cancer that was previously seen in Lilly's patent on the compound for Gemzar, US Patent Number '614. "In light of the earlier ’614 patent’s description of gemcitabine’s use in treating cancer, the asserted claims of the later ’826 patent, which recite a method of using gemcitabine to treat cancer, are not patentably distinct from the ’614 patent’s claim to gemcitabine,” said the court opinion, a copy of which is with Financial Chronicle.

The ruling may open the market for generic Gemzar three years earlier than it would have done if Lilly had triumphed. "The company has also been favoured in the Gemzar case by the US appellate court and would be able to launch the same on patent expiry," wrote Sriram Rathi, pharma analyst, Centrum Broking, to clients in a note.

But Lilly strongly disagrees with the ruling by the US court. "We continue to believe that our Gemzar method-of-use patent should be found valid and should remain in effect until mid-2013," said Robert A Armitage, senior VP and general counsel for Lilly. "We will consider all possible legal options, including a request for a further review of this panel decision by the full court."

The court decision does not allow for the immediate entry of generic gemcitabine in the US market.

Newspaper : Business Standard
Date : July 28, 2010
Page : 6

IGL hopes its Delhi success story is not just gas

Ajay Modi / New Delhi

With India’s gas production outpacing its crude oil production in 2009-10, the hankering for gas allocation has increased, too, but the lack of adequate gas infrastructure has seen the country losing out on gains from falling international prices. In a six-part series, Business Standard takes a look at the need for adequate infrastructure, even as cities are changing with relatively new gas lifelines.

Indraprastha Gas Ltd, or IGL, shows all the benefits of having a free run in a lucrative market. The sole supplier of compressed natural gas (CNG) and piped natural gas in the national capital region has doubled its turnover and profits over the last five years. That is not bad for a company which was created out of necessity when the Supreme Court, following a public interest suit, ordered in July 1998 that all public transport vehicles in Delhi move to CNG and a network of at least 70 filling stations be created for them.

Spurred on by authorisation from the government last month, the company has now entered Ghaziabad, which, alongside Noida, is a breeding ground for large housing complexes (in other words, potential customers who would want to get rid of the tyranny of cumbersome cylinders).

FACTFILE
CNG Compression capacity : 36.40 lakh Kg/day
No of stations : 241
No of CNG vehicles in Delhi/NCR : 3,40,000
No of domestic customers : over 1,90,000
No of Large Commercials : 52
No of Small Commercials : 305
Operational cost of CNG vehicles is 62 per cent lower than petrol and 27 per cent lower than diesel.
Net sales (2009-10) Rs 1,078 crore
Net profit (2009-10) Rs 215.49 crore

Gurgaon in NCR is way behind Delhi in city gas connectivity. It has only a handful of CNG stations run by Haryana Gas Company and virtually no piped gas connectivity.

However, experts doubt that Delhi’s success would be replicated elsewhere. The doubters include L Mansingh, the chairman of downstream regulator Petroleum and Natural Gas Regulatory Board, who attributes the development of the CNG network in Delhi primarily to the Supreme Court’s intervention.

Many are also quick to point out that the company’s filling stations in Delhi’s prime locations continue to have long queues.

The running cost of a car on CNG, despite a recent price rise of Rs 5.60 a kg, remains about 62 per cent cheaper than those run on petrol and 27 per cent cheaper than the diesel ones. That ensures enormous interest of buyers in CNG vehicles. The fact that many of them, given the tank capacity, need to visit a filling station every couple of days does nothing to shorten the queues.

IGL, though, remains sanguine. The queues, it says, would vanish once it is allowed to operationalise the 40-odd stations which are stuck in the maze of clearances.

“We have been proactive in expanding the CNG pump network. However, due to the long-drawn licensing process involving various departments, 40 stations are unable to dispense CNG. The licensing process takes up to six months in most cases and that is the only thing coming in the way. It is not a delay at our end,” IGL Managing Director Rajesh Vedvyas told Business Standard.

In the last financial year, IGL set up 60 stations. Another 39 are in different stages of development. By March next year, the company hopes to have 280. “We have doubled our capacity to service the CNG consumers in the last three years and invested over Rs 1,000 crore. This is no mean achievement,” Vedvyas said.

On the piped natural gas, Vedvyas said the company had been unable to dig for pipes as large parts of the city are already dug up in preparation for the Commonwealth Games, to be held in October. “We have 190,000 piped natural gas connections across Delhi and NCR. We plan to give 60,000-70,000 new connections every year in Delhi and 10,000-15,000 in NCR. There is no dearth of resources,” said Vedvyas.

In Ghaziabad, its new territory, IGL is facing problems because the GAIL pipeline, which feeds IGL’s network in east Delhi, has limited capacity. “We are setting up a spur pipeline to address this problem. This pipeline should be completed by October,” said Vedvyas.

That, the company would hope, will establish that IGL’s Delhi success story is not just gas.

Newspaper : Financial Chronicle
Date : July 28, 2010
Page : 9

ONGC, IOC stake sale still uncertain

By Siddhartha P Saikia,New Delhi

Will government sell its stake in largest explorer ONGC and biggest oil marketing company IOC remains a million dollar question, at least for now. Finance and petroleum ministries seem to differ on the timing of stake sale in ONGC and IOC.

Differences between both finance and petrol¬eum ministries came to fore at a news conference held to launch the follow on offer (FPO) of Engineers India (EIL).
Disinvestment secretary Sumit Bose told newsmen clearly that FPOs from these two companies are not on its timetable for this financial year. Bose said: “Nothing is on the table.”

Petroleum secretary S Sundareshan begged to differ, albeit indirectly, creating a flutter. Sundar¬eshan said, “The matter will be considered during the course of this year.”

Following persistent que¬s¬tions from news¬per¬sons asking for a timeline to divest in the oil companies next financial year, Bose clarified, “Nothing is on the table.”

Post de-regulation in petrol prices, hike in diesel, domestic cooking gas and kerosene rates last month; oil companies have banked heavily on revival of investor confidence in them. Sub¬sidy burden for upstream companies is expected to be lower while OMCs are free to sell petrol at market-determined price.

Meanwhile, disinvest¬ments secretary Sumit Bose listed the half a dozen companies in which the government may sell equity to meet Rs 40,000 crore target in the current fiscal year. At present, it has undertaken process for selling its stake in five companies.

“Process for divestment in Power Grid Corporation of India, Coal India, Hindustan Copper, Steel Authority of India and Manganese Ore (India) has been under¬taken,” Bose said.

The government has already divested its 10 per cent stake in Satluj Jal Vidyut Nigam Limited (SJVNL) that fetched Rs 1,068 crore.

When asked, if divest¬ment in these companies will be able to meet its target, Bose said: “This will not add up to Rs 40,000 crore.” The disinvestment secretary didn’t divulge details of companies in which the Centre may consider selling stakes. Government plans to raise Rs 977 crore on the higher end of the price bend from EIL’s public issue that opened on Tuesday.

Newspaper : Financial Chronicle
Date : July 28, 2010
Page : 11

Energy reforms must for growth

By BK Chaturvedi

The introduction of reforms process in the 1990s led to structural change in the economy. With larger participation of private players, the GDP growth rates gradually picked up. With energy–GDP elasticity being around one, the economy required higher energy inputs for the growth. The broad strategy in this direction has been to open up the energy sector to private investments and thereby step u growth.

In the petroleum sector, the New Exploration and Licensing Policy (NELP) was launched in 1999 to attract private investment in oil exploration, foreign technology and capital. More than 230 blocks have been awarded during eight rounds of NELP bids and it has started showing results, with major gas discoveries in the KG Basin in the east coast, and large heavy oil discovery in Rajasthan with likely peak production of 8 million tonnes per annum. Exploration in many of these blocks is continuing and more discoveries are possible. Policy changes have also led to the awarding of a large number of blocks to private players for coal exploration with 47 billion tonnes of coal reserves potential in captive mining.

A bill was also introduced to open up the coal sector further for private investment. The new Electricity Act, 2003, further strengthened the initiatives and developed the legal framework for investment by private players. Promoting open access and purchase of power from private power generating companies by state utilities, based on identified bidding criteria, has led to increased interest by private players in setting up new power plants. The last two decades have seen policies promoting private competition, liberalisation and development of a legal framework for promoting larger investments.

Similar policies have also been followed in the field of atomic power plants. After uranium has become available from international companies, based on agreement with countries of the nuclear suppliers group, rapid expansion of atomic energy has been planned. To develop clean energy, consistent with climate change issues, a new National Solar Mission has been launched to develop 20,000 mw power. An Integrated Energy Policy (IEP) which suggested a framework and made projections for the next two decades, has been approved by the government.

Petroleum oil refining capacity has grown by more than three times from 58 million tonnes (1990), to about 180 million tonnes at present through large scale private sector participation. The west coast of India is now becoming a major hub for export of petroleum products.

Reforms in petroleum and natural gas pricing are taking shape gradually. The import of LNG at Dahej and Hazira LNG terminals has facilitated gas availability to a large number of non-power and fertiliser consumers. Price reforms for petroleum products for industrial fuel and feedstocks were implemented during early 2000 when price of naphtha, furnace oil and ATF were made market-determined.

However, the government till May 2010 fixed the price of petrol, diesel, kerosene, LPG and natural gas produced by NOCs. The natural gas price for the gas produced by NOCs is now oil index-based with floor and cap and is close to the market price parity. Recently, in June, the government decided to keep petrol prices linked to market price parity, while diesel prices are yet to be linked to market price parity. High economic growth of six to nine per cent during the past two decades has been possible due to the reforms made by the government in the energy sector.

To achieve a high economic growth of 9 per cent and more during the next 10–20 years, it would be important to implement full-scale reforms in the energy sector, as large share of energy is likely to be met from imports in the future. However, it would also be important to implement highest level of efficiencies for energy use by various sectors to achieve a low carbon economic growth for the country during the next 10–20 years.

There are several challenges to the energy sector in the coming years. Poor financial health of power distribution utilities that are with the state governments is a serious gap. The lack of investments in transmission and distribution network, poor governance, non-revision of tariff and free power to farmers has led to poor health of these utilities. They are likely to incur more than Rs 40,000 crore of annual losses according to 2009-2010 estimates. The challenge in the sector will be to privatise the distribution network, step up investments, promote open access and improve governance. The growing need for power will require substantially higher domestic availability of coal. Issues of the environment will have to be resolved quickly. Work on new mines must start early, demand-side management of energy will require measures on energy efficient equipment, new strategies for setting up 660/800 mw power plants, additional capacities from gas and nonconventional sources and higher energy efficiency in industry and power appliances, like air conditioners, agriculture pumpsets will have to be worked out.

The author is member of Planning Commission and former cabinet secretary