UPDATE 2-US court rules for Teva on Merck hypertension drugs

Tue Mar 2, 2010 2:56pm EST

* Appeals court says Teva entitled to 180-day exclusivity

* Ruling involves generics of Merck's Cozaar, Hyzaar

* Cozaar, Hyzaar patents expire in April

* Teva shares up 1.4 pct, Merck shares up 0.7 pct (Adds analyst comment)

NEW YORK, March 2 (Reuters) - A U.S. appeals court ruled that Teva Pharmaceutical Industries Ltd (TEVA.TA) is entitled to 180-day marketing exclusivity for its generic versions of Merck & Co's (MRK.N) widely used Hyzaar and Cozaar blood pressure medicines, Teva said on Tuesday.

Israel-based Teva, the world's largest maker of generic drugs, said the U.S. Court of Appeals for the District of Columbia Circuit ruled in its favor, and its shares rose 1.4 percent on Nasdaq TEVA.O.

The decision overturned a July district court ruling that held that Teva had forfeited its 180-day marketing exclusivity, which is usually awarded to the first company that files with U.S. health regulators seeking approval for a generic drug.

The appeals court ruling is "an unexpected upside surprise for Teva," Collins Stewart analyst Louise Chen said in a research note.

Chen estimated the exclusive opportunity could add 13 cents per share to her 2010 earnings estimate of $4.50 per share for Teva.

The ruling is also good news for Merck, which was bracing for multiple generics hitting the market when its patents expire next month. That would have meant much faster erosion of its sales. Merck shares were up 0.7 percent.

Cozaar and Hyzaar had combined worldwide sales of $3.6 billion in 2009. U.S. sales were about $1.5 billion, Teva said.

While branded drugs can lose as much as 80 percent of sales once cheap generics versions flood the market, the erosion is typically slower when one generic competitor steps in.

The exclusivity period also lets the generic company charge a bit more for its drug before competition forces cheaper pricing for all generics.

Merck said its attorneys were reviewing the court ruling. It said the decision does not affect the April expiration date of its patents.

Teva shares were up 87 cents, or 1.4 percent, at $61.48 on Nasdaq, while Merck shares rose 26 cents to $37.53 on the New York Stock Exchange. (Reporting by Bill Berkrot and Lewis Krauskopf; Editing by Robert MacMillan, Gary Hill)