Sun Pharma settles Teva patent spat with Pfizer for $550 mn

Indian generic drugs maker Sun Pharmaceutical Industries and US giant Pfizer Inc on Wednesday announced that they had settled their patent battle out of court.

Pfizer said in New York that a $2.15-billion settlement was reached with Teva Pharmaceutical Industries Ltd and Sun Pharmaceutical Industries Ltd for patent-infringement damages resulting from their "at-risk" launches of generic Protonix(R) in the United States.

Sun Pharma on the other hand said in Mumbai that it will pay a lump sum of around Rs3,100 crore ($550 million) to settle litigation over sale of the generic pantoprazole drug in the US.

''Under the terms of the litigation settlement between Sun Pharma and Wyeth (now a division of Pfizer Inc) and Altana Pharma AG (now known as Takeda GmbH), the parties have dismissed all their claims and Sun Pharma will pay a lump sum of $550 million as part of the settlement,'' Sun Pharma said in a statement to the Bombay Stock Exchange.

The settlement comes after a nearly 10-year legal battle in which Pfizer and Nycomed (now part of Takeda) sought to enforce the patent for its blockbuster acid reflux medicine. Pfizer and Takeda will divide the proceeds of the settlement, with Pfizer receiving 64 per cent.

"We are pleased with today's settlement, which recognises the validity and value of the innovation that led to Protonix," said Amy W Schulman, executive vice president and general counsel of Pfizer.

"Protecting intellectual property is vital as we develop new medicines that save and enhance patients' lives."

Under the terms of the settlement, Teva and Sun will pay a total of $2.15 billion to compensate Pfizer's subsidiary Wyeth and Takeda for the damages they suffered when Teva and Sun launched "at-risk" generic versions of Protonix prior to the January 2011 expiry of the patent for pantoprazole, the active ingredient in Protonix.

These "at-risk" launches were determined by a jury in New Jersey federal court to violate United States Patent No4,758,579, which is owned by Takeda and was licensed exclusively to Wyeth in the United States. The parties reached the settlement shortly after the commencement of a trial to determine damages in the same New Jersey federal court.

Teva will pay Pfizer and Takeda $1.6 billion and Sun will pay $550 million. Teva will pay $800 million in 2013 and the remaining $800 million by October 2014; Sun's entire payment will be made in 2013. As part of the settlement, both Teva and Sun have admitted that their sales of generic pantoprazole infringed the patent that was held valid by the court.

"Today's settlement reflects our resolve to enforce our patents both in and out of the courtroom," Schulman said. "We are proud of the work of the scientific colleagues who developed this medicine and the lawyers who defended it."