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Shire reaches settlement with Barr over Adderall XR

Generic sales of top-selling ADHD drug delayed until April 2009

Shire has settled a long-running patent dispute with Barr Pharmaceuticals over the US firm's attempt to market generic versions of attention deficit hyperactivity disorder (ADHD) drug, Adderall XR.

Shire, the maker of the Adderall XR, said Barr would not be permitted to market a generic version in the US until April 1, 2009, except for certain limited circumstances such as the introduction of a generic version by another firm.

Last year, sales of the once-daily pill totalled $730.8m, representing 46 per cent of Shire's revenues.

As part of the settlement, Barr has agreed to permanent injunctions confirming the validity of three Shire patents and has also admitted that any generic product made under an abbreviated new drug application would infringe on one of these patents.

Shire said no payments to Barr are involved in the deal.

ìWe are very pleased to have reached this settlement on terms that are consistent with our beliefs that Shire's patents are valid and enforceable and infringed by would-be generic competitors,î said Shire chief executive, Matthew Emmens.

In January, Shire announced a settlement with Impax Laboratories allowing the generics firm to market a version of Adderall no earlier than 181 days following a Barr launch.

Analysts said the Barr agreement was very significant for Shire, because it will now ensure ongoing sales of Adderall XR until the UK company can switch patients to its successor, NRP104, which is expected to be launched in early 2007.

In separate agreements, Barr's subsidiary, Duramed, has agreed to buy the original `immediate release' formulation of Adderall from Shire for $63m, while Shire will pay up to $165m for the rights to sell oral contraceptive, Seasonique, and transvaginal ring technology that will be applied to five women's health products, made by Duramed, in the UK, Germany, France, Italy and Spain.

The Barr settlement has yet to be approved by the US Federal Trade Commission (FTC) although one analyst commented that the deal was ìnot too offensiveî to antitrust authorities.

ìGiven the structure of the deal, we think there is a reduced probability that the FTC/Department of Justice intervenes,î said analysts at Morgan Stanley in a research note.

In early trade on 15th August, shares in Shire jumped over 5 per cent.

30th September 2008

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