The dispute pending in the New Jersey District Court covers pharmaceutical compositions and methods of treatment with the form of modafinil contained in Provigil.

The two companies signed an agreement under which Cephalon will grant a non-exclusive royalty-bearing right to Ranbaxy to market and sell a generic version of Provigil in the United States, which will become effective in October 2011 in the absence of a paediatric extension for Provigil, which would delay the entry date by six months to April 2012. An earlier entry by Ranbaxy may take place based upon the entry of another generic version of Provigil.

The companies also agreed to a series of business arrangements related to modafinil.

Specifically, Ranbaxy has agreed to grant to Cephalon a non- exclusive license, effective immediately, to certain of its world-wide intellectual property rights related to modafinil in exchange for milestone payments.

Cephalon also has agreed to enter into certain arrangements with Ranbaxy related to Ranbaxy's supply of the active pharmaceutical ingredient modafinil.

The terms of the agreement are confidential, and are subject to review by the US Federal Trade Commission. Financial terms of the settlement have not been disclosed.

The two companies will now file for 'a dismissal with prejudice' with the District Court of New Jersey that will conclude all pending litigation between them regarding Provigil. These lawsuits claim infringement of Cephalon's U S patent RE37, 516, which covers pharmaceutical compositions and methods of treatment with the form of modafinil contained in Provigil. This particular patent expires in October 6, 2014, and may be extended by six months to April 6, 2015, upon submission of paediatric study data that is acceptable to the U S FDA.

In another case that Ranbaxy is fighting in the US courts, the Indian drug firm had announced its decision earlier this week to contest a District Court of Delaware ruling against it for non-infringement and invalidation of two Pfizer patents on atorvastatin, the largest selling cholesterol-lowering drug in the world, marketed by Pfizer under its brand, Lipitor. ()

Ranbaxy Laboratories Ltd, jointly with the Geneva-based Medicines for Malaria Venture (MMV), is developing new anti-malarial drug, designated RBx and is also introducing two new anti-HIV products, Virolis-E and Virocomb-E, which contain three anti retroviral drugs each and offer WHO recommended first line 'highly active anti retroviral therapy' (HAART) in convenient daily use packs in India.

  also see : Ranbaxy to appeal US District Court decision upholding Pfizer Atorvastatin Patents