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Teva and Sun pay dearly for 'at-risk' generic Protonix launch

Will pay $2.15bn in landmark patent infringement lawsuit

Generic drugmakers Teva and Sun Pharma have been forced to pay $2.15bn to settle a landmark patent infringement lawsuit related to their launch of generic versions of Pfizer and Takeda's Protonix.

The settlement marked the end of almost a decade of litigation over the intellectual property for Protonix (pantoprazole), and is the first time that generic pharma companies have been punished for bringing a generic to market before the patents on a branded medicine have run out.

Teva and Sun took a risk in 2007 and 2008 when they launched pantoprazole generics ahead of the expiry of the US patent on the drug in January 2011, gambling that ongoing patent litigation would go their way.

Pfizer and Takeda prevailed in a series of court cases, however, and in April 2010 Teva and Sun were ordered to take their generics off the market. At the time figures of around $400m-$500m in possible settlement charges were being discussed.

There were signs earlier this year that Teva was however preparing for a much more expensive settlement after it revealed a contingency fund set up to cover charges related to the case was being increased from $670m to $2.1bn.

Sales of Protonix peaked at $1.9bn in 2007, but plummeted nearly 60 per cent the following year to $1.1bn - with US sales down 80 per cent - and continued to fall in subsequent years. A trial had been due to start next month in which Pfizer and Takeda were expected to issue demands for damages and reimbursement of lost sales between 2007 and 2011.

The breakdown of the settlement will see Teva pay the largest share - $1.6bn split evenly between 2013 and 2014 - while Sun will pay $550m. Pfizer will receive 64 per cent of the damages, with Takeda - which was drawn into the dispute following it takeover of Protonix developer Nycomed - gathering the remainder.

13th June 2013

From: Sales, Regulatory

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