AstraZeneca heads off Nexium threat with Teva deal

AstraZeneca heads off Nexium threat with Teva deal

London: Anglo-Swedish drug maker AstraZeneca Plc settled a US patent row over Nexium with Israel’s Teva Pharmaceutical Industries Ltd on Thursday, protecting its top-selling heartburn drug from immediate generic competition.

The deal with Teva, the world’s biggest generic drug producer, mirrors a similar agreement in April 2008 with Indian firm Ranbaxy Laboratories Ltd, which had also challenged patents on the drug.

In both cases, AstraZeneca has granted a licence allowing the generic firms to start selling a cheap copy of Nexium, or esomeprazole, in the US market on 27 May 2014, when the first of its patents expire.

Ranbaxy, however, has an edge over Teva since it was the first to file for a US generic version of Nexium, entitling it to 180 days of exclusivity before rivals enter the market.

“This settlement strikes an appropriate balance between protecting the value of our shareholders’ investment in Nexium, mitigating uncertainties and addressing the many other costs associated with patent litigation," said AstraZeneca spokesman Neil McCrae.

The deal with Ranbaxy two years ago was seen by analysts as removing the main threat to Nexium, but there had been speculation Teva might fight on rather than agreeing to settle.

AstraZeneca’s Nexium patent infringement litigation against another company, Dr Reddy’s Laboratories Ltd, is still continuing.

“While the challenge from Dr Reddy’s remains, along with earlier-stage challenges from (Novartis unit) Sandoz and Lupin, the odds of these companies winning—and thus launching an early generic of Nexium—would appear to have receded given the precedent with Ranbaxy and Teva," said Deutsche Bank AG analyst Mark Clark.

Morgan Stanley analysts said Dr Reddy’s posed the only credible risk to Nexium sales before 2014 and predicted AstraZeneca would settle with the firm before the end of 2010.

Nexium is AstraZeneca’s biggest seller, but sales are declining, particularly in the US, where the company has been forced to cut prices in an increasingly competitive marketplace.