A US court has overturned a ruling from three years ago that several generic-drug makers did not infringe Pfizer’s patent on Neurontin, the company’s former blockbuster treatment for epilepsy.

The Court of Appeals for the Federal Circuit says that the New Jersey Federal District Court should not have backed the generic firms and allow them to make copycat versions of Neurontin (gabapentin), and that a full trial should now be held on Pfizer's allegations of patent infringement. The latter says that its patent on Neurontin does not actually expire until 2017.

Pfizer said this latest ruling will allow it to seek a judgment of infringement and, if this proves successful, the New York-based drugs giant will “pursue full compensation for the damage it suffered” from the 2004 ‘at-risk’ launch of generic Neurontin. Before any ruling had been made, Teva started selling copies of gabapentin three years ago, and it was followed into the market by a whole host of other drugmakers.

Prior to the launch of the generics, Pfizer's sales of Neurontin were more than $2 billion a year, but they promptly sank once the generic versions appeared. However, Pfizer did manage to switch patients to its epilepsy drug Lyrica (pregabalin), which had sales of $800 million in the second half of 2007.

This latest development marks the beginning of another interesting chapter in the history of Neurontin. Last summer, a new study unveiled the extent to which Parke-Davis – now part of Pfizer after its acquisition of Warner-Lambert - promoted the drug for off-label uses, a move which led to the firm being forced to pay in excess of $430 million in 2004 to settle claims relating to a US government investigation into the sales and marketing of Neurontin.

Japan facility may be spun off

Meantime, Pfizer is in talks with US, European and Japanese investors about spinning off an R&D facility in Japan as an independent entity next year.

The firm had previously planned to close the laboratory with about 380 employees in Aichi Prefecture by March 2008, but Pfizer Japan president Hiromitsu Iwasaki said at a news conference that other options are being looked at.

Various banks and funds have made different propositions but “whether Pfizer will take part with an equity stake is undecided," he said.