AstraZeneca PLC, the second- largest drug manufacturer in the U.K., said on Tuesday it has entered into a settlement agreement with Indian generics maker Ranbaxy Laboratories Ltd to conclude a lawsuit over a patent infringement case for its Nexium drug.
AstraZeneca, which is the world's sixth-biggest drug group by sales, said the agreement settles a patent infringement suit against Ranbaxy, which had requested permission to make a generic version of the drug to the U.S. Food and Drug Administration. Terms of the deal were not disclosed.
Under the settlement agreement, Ranbaxy concedes that all six patents asserted by AstraZeneca in the patent litigation are valid and enforceable, said London-based AstraZeneca in a statement, according to the source.
Ranbaxy can sell a generic version of Nexium starting in 2014 and will begin to produce the active ingredient for AstraZeneca next year. The drug is used to treat heartburn and generated $5 billion in revenue in 2007. U.S. sales of Nexium and Seroquel, a schizophrenia drug, made up about 21 percent of AstraZeneca's total sales of $29.56 billion last year, the Wall Street Journal said.
Separately, two different generic drug makers Teva Pharmaceutical Industries and Dr. Reddy's Laboratories that aim to market a generic version of Nexium still in litigation with AstraZeneca.
``The agreement allows us to spend more of our time and money in the laboratory and less in the courtroom,'' AstraZeneca, Chief Executive Officer David Brennan said in a telephone conference with reporters.
Nexium is the second largest drug prescription globally with sales of $5.200 million in 2007. Ahead in sales is placed Pfizer's treatment for cholesterol Lipitor with $12.000 million, Reuters noted.
Shares of AstraZeneca rose 4.43 percent or $1.76 in afternoon trading on the New York Stock Exchange.
Ranbaxy, India's largest drug producer gained 8.6 percent on the Bombay Stock Exchange.