Pharmaceutical major Ranbaxy Laboratories on Tuesday said it has settled a patent litigation with Anglo-Swedish firm AstraZeneca over ulcer drug Nexium, which would allow it to launch its generic version in the US by 2014.

Besides settling the patent litigation, Ranbaxy also entered into manufacturing agreement for AstraZeneca's US supply of Nexium from 2010 and a distribution agreement with the Anglo-Swedish firm for hypertension drug Felodipine and acidity drug remedy Omeprazole.

Nexium, the branded product of AstraZeneca, is the second largest selling drug in the US. The agreement settles the patent infringement litigation filed by AstraZeneca following Ranbaxy's submission to the United States Food & Drug Administration of an Abbreviated New Drug Application for esomeprazole magnesium's generic version.

Under the agreement, Ranbaxy would start selling the generic version from May 27, 2014 under license from AstraZeneca and during the 180 day exclusive marketing period, it will distribute the only generic esomeprazole magnesium product in the US market.

"We are happy with the agreement which will provide certainty as to the launch of a generic formulation of the second largest selling product in the US," Ranbaxy Laboratories CEO and Managing Director Malvinder M Singh said.

Ranbaxy conceded that all six patents asserted by AstraZeneca in the patent litigation are valid and enforceable.

"The revenues will flow in for Ranbaxy every year from next year due to these agreements," Singh said.

However, Singh declined to comment on the revenues that Ranbaxy would achieve through these agreements.

According to industry estimates, these deals would result in a revenue of about 1.5 billion dollars to Ranbaxy over the years.

As per the manufacturing agreement, Ranbaxy will formulate a significant part of AstraZeneca's US supply of Nexium from 2010 and the provisions for manufacture of esomeprazole magnesium, Active Pharmaceuticals Ingredient from May 2009.