AstraZeneca settles with Teva over Nexium

AstraZeneca (AZ) has announced it has reached an agreement with Teva Pharmaceuticals regarding the Israeli firm's proposed generic version of AZ's heartburn drug, Nexium, which AZ claim would have infringed the Anglo-Swedish firm's patent.

Under the agreement, AZ has granted Teva a license to enter the US market with its generic esomeprazole when the first Nexium patent expires on 27 May 2014, subject to regulatory approval, or earlier in certain circumstances.

Teva, the world's biggest generic drug maker, accepted that all patents-at-issue in the litigations are valid and enforceable, and conceded that six Nexium patents would be infringed by the manufacture on sale of esomeprazole. With this the US District Court for the District of New Jersey will enter a Consent Judgment and corresponding Nexium patent litigations will be dismissed/

The deal further protects AZ's top-selling drug from generic competition following a 2008 out-of-court settlement with Indian company, Ranbaxy Laboratories, who also conceded to patent infringement. Like Teva, their generic version of Nexium is being held back until 2014.

In a separate agreement, AZ and Teva have agreed to settle patent litigation related to Prilosec (omeprazole). This settlement will see a one-time payment to AZ to cover past infringing sales, though AZ have described the terms of the agreement as "not financially material".

News of the settlements has seen AstraZeneca's shares increase by 1.4% as Teva's fell by 0.2% (both details as of 9.32am GMT, Thursday January 7.)

A further patent dispute regarding Nexium with Indian firm, Dr Reddy's Laboratories is still to be settled.