Morepen Laboratories Limited received a favorable judgment from the Hon'ble High Court of Himachal Pradesh at Shimla on October 12, 2026. The court quashed a Show Cause Notice seeking ₹117.94 crore in GST recovery, disposing of the writ petition in the company's favor.

The litigation stemmed from a notice issued by the Office of the Commissioner, Central GST & Central Excise Commissionerate, Shimla. The authority alleged that Morepen had contravened Section 54 of the CGST Act, 2017, read with Rule 89 of the CGST Rules, 2017, by erroneously claiming an excess GST refund under Rule 89(4).

Resolution of Tax Dispute

The dispute originated from an SCN dated December 2, 2025, which sought recovery of ₹117,94,03,452 towards excess GST refund, along with applicable interest and penalty. Morepen had previously disclosed this development to stock exchanges in December 2025 and January 2026, noting that the High Court had granted a stay on the recovery proceedings.

The final order, received by the company on October 14, 2026, at 3:00 pm, effectively nullified the demand. The court's decision concludes the legal challenge initiated by the tax authorities regarding the refund claims.

Financial Impact Assessment

In its disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Morepen stated that there is no impact on its financials, operations, or other activities due to this order. The quashing of the notice removes the contingent liability associated with the disputed amount.

What the Numbers Show

The resolution of this matter highlights the significance of judicial intervention in large-scale indirect tax disputes. The disputed amount of ₹117.94 crore represents a substantial sum relative to typical operating cash flows for mid-cap pharmaceutical firms. By securing a complete quashment rather than a partial settlement or remand, Morepen has avoided both the principal outflow and the compounding interest and penalty costs that would have accrued during the litigation period. The absence of any financial impact statement confirms that no provisions were likely required to be adjusted in recent financial statements, preserving the balance sheet integrity.

Morepen Laboratories Limited has submitted its first Abbreviated New Drug Application (ANDA) to the U.S. Food and Drug Administration for Sitagliptin Tablets USP in 25 mg, 50 mg and 100 mg strengths. This milestone marks the company's transition from established API expertise to integrated finished dosage development and regulatory filing.

The submission, dated September 25, 2026, extends Morepen's capabilities into formulation development, bioequivalence strategy and regulatory dossier integration. The program includes analytical method validation, impurity control and stability studies conducted under GMP systems. By combining these scientific and regulatory skills, the company aims to support specialized CDMO assignments spanning API development through to commercial supply.

Strategic pivot to integrated CDMO

Sanjay Suri, Managing Director of Morepen Laboratories, stated that capability building is central to the company's next phase of growth. The ANDA submission demonstrates the ability to take an API through finished dosage development to a U.S. filing. This move supports broader CDMO opportunities across regulated markets in Europe and Asia, tailored to specific jurisdictional requirements.

The company plans to leverage this foundation for customer development programs, technology transfer and co-development opportunities. Future initiatives may include differentiated formulations and potential 505(b)(2) development programs, subject to product-specific studies and regulatory approvals.

Market context and timelines

Sitagliptin is an oral treatment for Type 2 diabetes belonging to the DPP-4 inhibitor class. The innovator product, Januvia, recorded worldwide sales of approximately $1.604 billion in 2025. The relevant U.S. phosphate salt patent is scheduled to expire in November 2026, with associated paediatric exclusivity extending to May 2027. Certain manufacturers have separate arrangements permitting earlier entry.

Morepen estimates a timeline of 24–36 months from submission to progress towards approval and commercial supply. This duration is subject to FDA review, satisfactory completion of facility inspections and applicable patent requirements. The submission does not constitute FDA acceptance for substantive review or authorization for U.S. commercial supply.

What the numbers show

The divergence between the $1.604 billion innovator sales figure and the pending generic entry highlights the scale of the opportunity versus the competitive intensity. While the patent expiry in November 2026 opens the market, the 24–36 month FDA review window means Morepen will likely enter after initial competitors who have earlier settlement arrangements. This timing suggests the company is positioning itself for sustained long-term partnerships rather than capturing the immediate post-patent expiry surge.