US generics maker Mylan and UCB have decided to settle a patent dispute relating to the Belgian drugmaker’s blockbuster epilepsy drug Keppra.

The two firms have been involved in a legal battle over Keppra (levetiracetam) in a US District Court in Georgia since March 2004 and the dispute referred to a patent which expires on July 14, 2008. Under the terms of the settlement, Mylan has the right to market its 250mg, 500mg and 750mg versions of generic levetiracetam from November 1 next year, provided that UCB obtains paediatric exclusivity for Keppra and Mylan's abbreviated New Drug Application obtains final approval from the US Food and Drug Administration.

If granted, paediatric exclusivity would extend one of UCB’s patents to January 14, 2009 and Mylan notes that entry into the market for its product could come sooner than November 1, if the FDA turns down UCB’s bid. Additional terms of the settlement are confidential, and the agreement is subject to review by the Department of Justice and the Federal Trade Commission, the firms said.

UCB has also reached an undisclosed settlement with Dr Reddy's Laboratories and Cobalt Pharmaceuticals in connection with the Keppra case and said that the sorting-out of these lawsuits “in a mutually beneficial manner was achieved following a mediation process at the encouragement of the court and will enable the parties to focus their efforts on the conduct of their respective businesses”.

The importance of Keppra to the Belgium firm is beyond doubt. Half-year 2007 sales of the drug, which is the market leader in Europe as well as in the USA, leapt 36% to 498 million euros and US turnover of the drug were approximately $742 million for the 12 months ending June 30 this year. Growth has been reinforced through new indications and a new intravenous formulation.

Meantime, analysts at JPMorgan have raised their rating on Mylan to ‘overweight’ from ‘neutral’ after the company, which has just completed its 4.9 billion euro acquisition of Merck KGaA's generics business, predicted earnings per share growth of 30%-35% by 2010, with sales increasing 15%.