MUMBAI, July 6: Fifteen-year-old Zantac has contributed more to his family income than any of his peers could possibly do in a lifetime. Born in a research lab at Ware, Hertfordshire, in the UK, Zantac has been his parents' pride from the very first day he made it to the chemist's shelf in Europe. And yet, the best was yet to come.

Within five years, Zantac, principally a tablet but also an injectible, became a $1 billion product for UK-based multinational Glaxo and the world's top selling medicine.

Annual sales of the product exceeded -- 1 billion before the end of 1988, nearly half the company's turnover. And, by the end of 1994, sales touched a mind-boggling -- 2.5 billion.

But July 26, 1997, the day the patent for anti-ulcerant Zantac (ranitidine) expires in the US, will mark the beginning of cut-throat generic competition, when four pharma companies (possibly the fifth could be Indian giant Ranbaxy) get ready to storm the market with their generic versions.

For Glaxo India, it could mean opportunities to emerge as one of the major sources for ranitidine base, an advanced intermediate that goes into Zantac.

Currently, Canadian generics manufacturer Novopharm, Geneva Pharma (a Novartis group company), Roxane (part of Boehringer Ingelheim) and Torpharm have already filed abbreviated new drug applications (ANDAs) for the Form 1 crystalline version of ranitidine.

Significantly, all the companies, including Ranbaxy, have been sued for patent infringement.

However, reports in the foreign media say that under a deal with Novopharm, the Canadian generics player will launch its Form 1 ranitidine product on July 10, 16 days before the patent expiry.

The US market represents about 30 per cent of the global value of the drug market and is imperative to the international growth of any drug company.

Glaxo India currently manufactures ranitidine at its Ankleshwar plant in Gujarat and uses the brand name Zinetac for its ranitidine HCL tablets. Though the patent expiry will have no implication on Zinetac sales, analysts say that to face the ensuing generic competition, the Glaxo group may turn to its Indian subsidiary for its generic requirements.

"Besides, given the low-cost advantage and India's proximity to the neighbouring markets of south-east Asia, Africa and the Middle East there could be some potential for the Indian arm on the export front too," an analyst said.

But what are the implications on Glaxo-Wellcome's bottomline after the Zantac patent expiry in the US? Glaxo Wellcome estimates that in the "worst case" scenario, 70-80 per cent of Zantac's current US sales of -- 1 billion could be eroded in the first year due to generic competition.

Because of the uncertainity it was creating in the stockmarket, the company decided to forecast the effect of patent expiry on its results in the next three years.

It believes that sales will grow in low single digit figures in 1997 and 1998 while earnings will be atleast maintained at current levels.

Officials in Glaxo India point out that Glaxo Wellcome has been reducing its dependence on Zantac and the drug now accounts for only 23 per cent of total sales.

And does Glaxo Wellcome see any other drug in its portfolio taking Zantac's place in the next few years? Officials say that the company now has substantial business in the respiratory, anti-virals and antibiotics segments, besides a rich research and development pipeline. In the central nervous system segment, Imigran, a major drug for the treatment of migrane, boasts of sales in excess of £ 500 million, while Raxar, a quinolone antibiotic for which a marketing application was filed in the United States of America in November 1996, is expected to be the first in a series of new anti-infectives,they said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.