* Takeda to receive 36 percent or about $774 mln
* Teva to pay $1.8 bln, half this year and rest by Oct 2014
* Sun Pharma to pay $550 million this year
By Pallavi Ail
June 12 Pfizer Inc said Teva
Pharmaceuticals Industries Ltd and Sun
Pharmaceutical Industries Ltd would pay $2.15 billion
to settle a patent suit related to its acid-reflux drug.
This is the first instance of generic drugmakers paying
damages for marketing a copy of an existing drug for which
patents have yet to expire - known as an 'at-risk' launch.
The Pfizer drug, Protonix, recorded peak annual revenue of
almost $2 billion in 2007, before sales plunged following the
launch of generic versions by Teva in 2007 and Sun Pharma in
The patent covering the active ingredient in Protonix --
pantoprazole -- expired in January 2011.
"It is an important milestone, setting a 'book-end' case for
the industry. It will serve to encourage patent settlements,"
Bernstein Research analyst Aaron Gal said in a note.
Morningstar analyst Damien Conover said the Pfizer case was
unique among these types of lawsuits as it involved a
"composition of matter patent" - one of the stronger patent
"We see more at-risk launches but probably of less powerful
patents," Conover said.
A New Jersey jury ruled that Teva had infringed the Protonix
patent in April 2010, following a protracted 10-year legal
A trial to determine damages began on Monday.
The patent was held by Nycomed, now a Takeda subsidiary, and
the drug was licensed to Wyeth, now owned by Pfizer.
Takeda will receive 36 percent or about $774 million from
the settlement, with the rest going to Pfizer.
Israel-based Teva, the world's largest generic drugmaker,
will pay $1.6 billion - half this year and the rest by October
2014. India's Sun Pharma will pay $550 million this year.
Teva said in February that it may face legal losses of up to
$2.07 billion to resolve the case.
Teva said on Wednesday it will record a charge of about $930
million in the second quarter, in addition to the $670 million
provision recorded in its 2012 financial statements.
However, the company said it may have up to $560 million of
net insurance coverage for the settlement.
"The Protonix damages were one of the negatives Teva had to
'get out of the way' before investors can focus on the company's
growth prospects," Bernstein's Aaron Gal said.
Separately, Teva reported positive results from a mid-stage
study of its experimental lupus drug that aims to treat
inflammation of the kidney caused by the autoimmune disorder.
The study showed that the drug when combined with
mycophenolate mofetil and corticosteroids - the current standard
of care - improved kidney function compared with current therapy
Teva's U.S.-listed shares were down about 1 percent at
$39.47 on the New York Stock Exchange.
HIT TO ACQUISITION PLANS
Sun Pharma set aside 5.84 billion rupees, or about $100
million, last November towards potential damages to Pfizer. The
company will now have to shell out a further $450 million as
"This is not a very positive out-of-court settlement," said
Daljeet Kohli, head of research at brokerage IndiaNivesh in
"The agreed amount is way too high for such a settlement. It
will also restrict Sun's ability to look for acquisitions."
The Indian company has been considering several potential
acquisitions. It was in talks to buy Swedish drugmaker Meda
and Israel's Taro Pharmaceutical Industries Ltd
, but both deals fell through.
Sun Pharma's shares closed little changed at 980.70 rupees,
prior to the announcement of the settlement.
Pfizer's shares were up about 1 percent at $28.69 , while
Teva's shares were down about 1 percent at $39.51.