LASCO Distributors Limited (LDL) revealed that by next March it will battle pharmaceutical giant Pfizer in the UKbased Privy Council, in order to secure the $400 million in damages awarded to the company in the lower courts.
The amount represents the distribution company's expected compensation for lost earnings over some seven years in which the sale of blood pressure drug Las Amlodipine was halted by a 2005 injunction issued to Pfizer, which had claimed that Lasco and Medimpex Jamaica used its patent-protected drug, Salts of Amlodipine, in their product.
The Supreme Court ruled in favour of Lasco and Medimpex in 2009, and the Court of Appeal dismissed Pfizer's objections in June last year.
Pfizer is appealing the decision at the island's highest court -- the Privy Council.
"It is anticipated that the matter should come before the Privy Council either by the end of this year or during the first quarter of next year," indicated LDL in notes accompanying its annual report released this week to the Jamaica Stock Exchange (JSE).
LDL reported year-end net profit of $506.8 million on $8.2 billion in revenues. The award, if maintained, would increase Lasco's equity base by some 20 per cent from the $1.8 billion reported at its March 2013 year-end.
"The attorneys are of the opinion that the company should be successful on this appeal and anticipate that the amount to be recovered by the company may be approximately $400 million," stated LDL's 2012 annual report.
Jamaica Money Market Brokers, in a July 2013 market research, indicated that the payout could grow to $1billion from Pfizer: "The company stands to improve its results through the distribution of new products (baby formulas, pharmaceutical pills, juices, water, etc) into new markets and Jamaica. The company also stands to benefit from a lawsuit settlement of $1 billion from Pfizer. Following the ruling in the court of appeal, if successful, the company will pay a special dividend to shareholders and use the remainder to improve the overall operations of the company."
A loss at the Privy Council would cost Lasco $25 million plus damages arising from profiting of the sale, stated the LDL annual report.
According to records submitted in court, total sales of Medimpex's product, Normodipine, amounted to approximately $45.2 million between 2001 and 2005, while Lasco's drug, Las Amlodipine, brought in $24.3 million in revenue between May 2002 and December 2005.
Pfizer reportedly sold US$1.2 million of its own product, Norvasc, in Jamaica in 2001, but its revenue fell to US$481,000 in 2002 when the two local companies introduced their hypertension and heart treatment drugs.