Novartis and MSN Settle Entresto Patent Dispute, Boosting Divi's Laboratories Outlook
Key Insights
Novartis and MSN Laboratories (search) have settled the '659 patent dispute regarding Entresto, a blockbuster heart failure drug generating $6 billion in annual sales for Novartis.
The legal battle now moves to the next patent expiring in November 2026, with regulatory exclusivity extending until May 2027, potentially delaying generic competition.
Divi's Laboratories (search), a key API supplier for Entresto, could earn ₹700 crore in FY26 if MSN launches generics in July 2025, or ₹1,000-1,200 crore if the launch is delayed.
Shares of Divi's Laboratories (search) gained following reports that Novartis and MSN Laboratories (search) have settled their patent dispute over the '659 patent protecting Entresto, Novartis' blockbuster heart failure treatment drug that generates approximately $6 billion in annual sales.
The settlement resolves one phase of the ongoing legal battle, but the litigation is expected to continue with the next patent in the timeline. This subsequent patent is set to expire in November 2026, with associated regulatory exclusivity extending until May 2027.
Financial Impact on Divi's Laboratories
Divi's Laboratories (search), which serves as a key supplier of active pharmaceutical ingredients (APIs) for Entresto to Novartis, is estimated to have generated ₹1,200 crore from Entresto API sales in FY25.
The timing of MSN's generic launch will significantly impact Divi's future earnings:
- If MSN launches the generic version in July 2025 when Entresto's main patent expires, Divi's estimated earnings from Entresto API could be ₹700 crore in FY26
- If MSN's launch is delayed due to continued litigation, Divi's could earn ₹1,000 crore to ₹1,200 crore in FY26
Market Response and Patent Timeline
Divi's Laboratories (search) shares gained 1.7% to hit an intraday high of ₹6,649 on Wednesday, June 18, following the settlement news. The stock was trading up 0.63% at ₹6,479.5 at 11:30 am and has gained 8.3% year-to-date.
The stock traded in a narrow range during the session, opening at ₹6,548 and reaching an intraday high of ₹6,640.50, with a session low of ₹6,513. The shares remain close to their 52-week high of ₹6,862.50, while the 52-week low stands at ₹4,395.30.
Analyst Outlook
According to analysts, this development could lead to potential upward revisions in Divi's financial estimates for FY26 and FY27, depending on how the litigation progresses and market dynamics evolve in the coming quarters. The terms of the current settlement between Novartis and MSN have not yet been disclosed.
Entresto has been facing generic competition from MSN, with Novartis engaged in legal battles to block the launch of generic versions. The resolution of the '659 patent dispute represents a significant milestone in this ongoing pharmaceutical patent litigation.