Teva Pharmaceutical Industries Ltd. (Nasdaq:TEVA; TASE:TEVA) reported last night that it had settled a patent lawsuit brought by Pfizer Inc. (NYSE: PFE) over a drug for treating seizures and pain caused by shingles.
The case has been dragging on for years, but yesterday Teva said that as a result of the settlement, the US District Court for the District of New Jersey dismissed the lawsuit, releasing Teva and its subsidiaries.
Teva did not disclose the terms of the financial settlement but it is believed that it was for less than $100 million.
The dispute between the two pharmaceutical giants revolved around generic versions of Neurontin or Gabapentin sold by Teva and subsidiary Ivax Pharmaceuticals. Pfizer claimed that it violated its patent for the treatment which has annual sales of more than $2 billion.
Ivax, which was subsequently acquired by Teva, launched the generic version of Neurontin seven years ago. Howver, pfizer claimed that its patent was valid until 2017 but the court ruled in 2005 that there had been no patent violation. On appeal, a higher court ruled that there were serious areas of dispute and that a full trial should be held.
The court hearing was expected to end this month but yesterday's announcement brings the saga to an end.
Pfizer had claimed that since the launch of the generic version it had lost billions of dollars, and when a generic manufacturer loses such a case it is liable to pay compensation of triple the profits lost by the branded manufacturer.
On the other hand, Teva claimed that Pfizer was enjoying major sales from a drug that had been illegally launched. Warner-Lambert, the company that developed the drug and had been acquired by Pfizer allegedly marketed it through benefits to doctors and misleading information.
Teva's share price was up 0.79% on Nasdaq yesterday to $50.90, giving a market cap of $45.45 billion.
Published by Globes, Israel business news - www.globes-online.com - on June 1, 2011
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