Mumbai: Shares of Sun Pharmaceuticals on Thursday fell sharply by nearly 7 percent in early trade, after the pharmaceutical major and Israel's Teva agreed to pay a sum of USD 2.15 billion to Pfizer and Takeda as part of patent infringement settlement.
Following the news, shares of Sun Pharma started the day on a weak note and as the trade progressed it further lost 6.62 percent to Rs 916 on the BSE.
At the NSE, the stock plunged 6.62 percent to Rs 915.70.
"While, the settlement amount is higher than already provided by the company, the settlement would end an overhang on the stock," said Sarabjit Kour Nangra, VP-Research, Pharma, Angel Broking.
Sun Pharmaceuticals and Israel's Teva will pay a sum of USD 2.15 billion to Pfizer and Takeda as part of patent infringement settlement for acid reflux medicine Protonix in the US.
"Under the terms of the settlement, Teva and Sun will pay a total of USD 2.15 billion to compensate Pfizer's subsidiary Wyeth and Takeda for the damages they suffered when Teva and Sun launched 'at-risk' generic versions of Protonix prior to the January 2011 expiry of the patent for pantoprazole, the active ingredient in Protonix," Pfizer had said in a statement.
As part of the agreement, Teva will pay Pfizer and Takeda USD 1.6 billion and Sun will pay USD 550 million, it added.
"Teva will pay USD 800 million in 2013 and the remaining USD 800 million by October 2014; Sun's entire payment will be made in 2013," the company said.
Both Teva and Sun have admitted that their sales of generic pantoprazole infringed the patent that was held valid by a jury in New Jersey federal court.
In the broader market, the BSE benchmark Sensex was trading lower by 230.38 points to 18,810.75 during noon trade.