Lasco says victory over Pfizer will add value to company
Lasco Distributors Limited (LDL) expects a payout of at least J$400 million from its court victory against international pharmaceutical company Pfizer, which its attorney says will boost the value of the company.
The amount represents Lasco's expected compensation for lost earnings over the seven years in which the sale of generic blood-pressure drug Las Amlodipine was halted.
The Appeal Court last week sided with an earlier ruling by the Supreme Court that Pfizer could not claim patent rights in Jamaica for Norvasc, when its patent had expired elsewhere in 1997. The decision handed victory to Lasco and Medimpex, both of which had been barred from selling generic versions of the drug.
"I would call it a vindication of the position that we are entitled to sell to poor people. It is going to see the increase in the value of Lasco Distributors Limited once we collect this from Pfizer," said Vincent Chen, one of the lawyers who represented Lasco.
The legal team also included Lloyd Barnett and Ian Robbins.
Chen said an additional amount related to costs associated with repositioning it in the market, which is yet to be determined, would be sought from Pfizer.
The Gleaner reported on June 1 that the payout to both companies could reach J$1 billion.
The drug sales lost to Lasco - which on Lasco's estimate averages J$57 million per year - represents a fraction of the company's turnover.
At yearend March 2012, LDL's pharmaceutical division made J$1.54 billion amid total sales of J$7.4 billion.
LDL also reported that yearend net profit rose 80 per cent to J$550 million, based on ramped up sales which grew 10 per cent across the company.
At minimum, the estimated J$400 million in sales compensation collected from Pfizer, would grow Lasco's equity base by 28 per cent, from the current J$1.4 billion reported at March to J$1.8 billion.
"The growth in revenue and profit increases was due to the commitment and effort by the management and staff to meet their performance targets in tandem with the long-term organisational objectives. There has been a push for a performance-driven culture where staff are incentivised and motivated in improving productivity and controlling cost," said LDL on the company's performance.
The case between Pfizer and the two Jamaican companies dates back to 2002. In 2005, Pfizer got the local courts to block Lasco and Medimpex sales, on the basis that it infringed its patent.
Its patent in Jamaica was granted well after the court fight began, on June 22, 2007.
However, in 2009, Justice Roy Jones ruled that Pfizer could not legally hold a patent in Jamaica when its patent in Egypt had expired on March 31, 1997, citing the Patents Act of 1857 which says that once a patent expires in another country, it cannot be registered in Jamaica. That ruling was upheld last week on appeal.