Teva did not infringe OxyContin patents, shares rise

Tue Jan 14, 2014 5:46pm EST

(Reuters) - A federal judge said Teva Pharmaceutical Industries Ltd did not infringe five patents related to the painkiller OxyContin, helping push shares of the world's largest generic drug manufacturer up 6.7 percent on Tuesday.

Earlier in the day, Teva executives said at a JPMorgan healthcare conference that they were confident a new version of its multiple sclerosis drug Copaxone that requires less frequent dosing will soon win regulatory approval for use in the United States.

In a 115-page decision in the patent case, U.S. District Judge Sidney Stein rejected arguments by OxyContin manufacturer Purdue Pharma Inc that Teva infringed its patents by seeking U.S. Food and Drug Administration approval to sell generic equivalents of the drug.

Purdue said it will appeal.

Three of the patents related to an improved formulation of oxycodone, the active ingredient in OxyContin.

The other two patents were designed to prevent tampering that could allow would-be abusers to transform the tablets into an injectable liquid that could give them an opioid "high."

Ruling after a roughly four-week nonjury trial that ended on October 15, Stein said Purdue had shown it was more likely than not that Teva's proposed products infringed four patents.

But the judge said Teva demonstrated by "clear and convincing evidence" that the claims should be rejected.

He said Teva proved that four of Purdue's patents were "obvious" or lacked "novelty," meaning that they didn't significantly advance what was already known, and that the fifth patent was not infringed in the first place.

"With respect to every patent-in-suit, either (1) Teva's (abbreviated new drug application) does not occupy the technological space where plaintiffs enjoy the right to exclude others, or (2) plaintiffs' right to exclude others is based on an invalid patent," Stein wrote.

Philip Strassburger, Purdue's general counsel, said in a statement: "We are confident in the strength and validity of our patents and are disappointed in the court's decision. We intend to appeal."

Teva spokeswoman Denise Bradley declined to comment.

Purdue Pharma is based in Stamford, Connecticut. Teva is based in Petach Tikva, Israel, and has U.S. offices in North Wales, Pennsylvania.

While Teva is better known for making generic drugs, its branded Copaxone drug accounts for about 20 percent of sales and 50 percent of profit.

Analysts believe it is important for Teva to roll out its newer version, which patients would inject three times a week rather than daily, before cheaper generic versions reach the market as soon as this year.

Analysts believe it is important for Teva to switch patients to its new version of the drug, which they would inject three times a week rather than daily, before cheaper generic versions hit the market as soon as this year.

Shares of Teva closed up $2.78 at $44.21 on the New York Stock Exchange.

The case is Purdue Pharma LP et al v. Teva Pharmaceuticals USA Inc, U.S. District Court, Southern District of New York, Nos. 11-02037 and 12-05083. The main litigation is In re: OxyContin Antitrust Litigation in the same court, No. 04-md-01603.

(Reporting by Jonathan Stempel and Bill Berkrot in New York; Additional reporting by Diane Bartz in Washington, D.C.; Editing by Ken Wills)

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