AstraZeneca settles with Teva over generic Nexium

AstraZeneca has again fended off the threat of an imminent copycat version of its heartburn blockbuster Nexium hitting the US market by settling a patent dispute with Teva Pharmaceutical Industries.

Under the terms of the settlement, the Anglo-Swedish drugmaker has granted Teva a licence, subject to regulatory approval, allowing the Israeli firm to enter the US market with its generic version of Nexium (esomeprazole) delayed-release capsules on May 27, 2014, “or earlier in certain circumstances”. Additional details have not been disclosed.

Teva has conceded that all patents-at-issue in are valid and enforceable. and accepts that six Nexium patents would be infringed by the manufacture or sale of generic esomeprazole. As such, a court in New Jersey will enter a consent judgment and the corresponding Nexium patent litigations will be dismissed.

This settlement of patent litigation mirrors a deal AstraZeneca struck with Ranbaxy Laboratories in April 2008. The same 2014 date applies to the Indian drugmaker which was the first to file its generic version of Nexium with the US Food and Drug Administration, so it will have 180 days of marketing exclusivity. A patent dispute with another Indian firm, Dr Reddy’s Laboratories, has yet to be settled.

In a separate agreement, AstraZeneca and Teva have agreed to settle patent litigation related to the forerunner of Nexium, Prilosec (omeprazole). Under the terms of that deal, Teva will make a one-time payment to AstraZeneca for past infringing sales, though the sums involved “are not financially material”. Merck & Co, which is entitled to a cut of revenues from both drugs, has also entered into the settlements.

The settlement has gone down well with AstraZeneca investors who will be pleased that a costly legal battle has been largely avoided. At 9.40am UK time, shares in the Anglo-Swedish drugmaker were up 1.2% to £29.10.