Teva Pharmaceutical Industries has indicated it may have to take charges of more than $2 billion for jumping the gun on the US launch of a generic form of Pfizer's Protonix.

The Israeli drugmaker has indicated in its latest annual report that it plans to add $1.4 billion to the $670 million already set aside to cover potential damages in the case.

The case dates back to May 2004 when Nycomed (now owned by Takeda) and Wyeth (now part of Pfizer) filed a patent infringement lawsuit against Teva and Indian company Sun Pharmaceutical for launching generic versions of Protonix (pantoprazole) in early 2008, ahead of the expiry of a key US patent in January 2011.

Teva and Sun were ordered to stop selling their generics by a US federal court in April 2010 after Pfizer successfully defended the validity of its patent, although litigation on the issue is continuing.

Pfizer is suing for damages related to the loss of Protonix sales in the USA, and last year the company said it was seeking $960 million in damages from Sun, with analysts suggesting that Teva may be liable for some of Sun's damages and vice versa.

At the time it was suggested that the parties in the litigation would reach an out-of-court settlement of between $400 million and $600 million.

A Wall Street Journal report notes that Pfizer is scheduled to go to court in July to make its damages claim to Teva, which continues to dispute the validity of the patent as well as the level of lost sales claimed by Pfizer.

In 2007, before Teva and Sun started their at-risk launches of generic Protonix, sales of the drug reached $1.9 billion, then slumped 58% in 2008.