AstraZeneca settles another Nexium patent litigation for US sales

AstraZeneca today settled a long-running US patent dispute with Israel's generics maker Teva Pharmaceuticals and again protected its top-selling heartburn drug Nexium from generic competition till May 2014.

Under the settlement the UK-based AstraZeneca has agreed to grant Teva a license for the drug in the US on 27 May 2014, when the first of its patents expire.

The settlement of the dispute for Nexium, mirrors an April 2008 patent litigation settlement arrived with India's top drugmaker by sales, Ranbaxy Laboratories Ltd, now acquired by Japan's Daiichi Sankyo (See: Ranbaxy settles litigation with AstraZeneca; to sell Nexium in US), but a suit filed against Hyderabad-based Dr Reddy's Laboratories for patent infringement of the same drug is still pending in the US court. 

However, Ranbaxy will have an edge over Teva and other generic makers since it was the first to file with the US Food and Drug Administration for a US generic version of Nexium, which gives it six-month exclusivity period from May to October of 2014. That agreement allows Ranbaxy to formulate a portion of AstraZeneca's US supply of Nexium from May 2010, with the active ingredient in the drug, esomeprazole magnesium, being made from May 2009.

Teva, the world's largest generic drug maker maintains that all patents-at-issue in its US Nexium patent litigations are valid and enforceable. Teva has also conceded that six Nexium patents would be infringed by the manufacture or sale of Teva's US generic esomeprazole.

In a separate agreement, AstraZeneca and Teva have agreed to settle patent litigation related to Prilosec (omeprazole). Under this agreement, Teva will make a one-time payment to AstraZeneca for past infringing sales.

With 2008 sales of $ 31.6 billion, AstraZeneca said that the terms of this agreement were not financially material and both companies will jointly file for a dismissal of the case.

Nexium is AstraZeneca's second largest selling drug in the US, whose sales have fallen by 7 per cent to $2.1 billion in the first nine months of 2009 in the US, where AstraZeneca had to reduce prices mainly due to competition.