Monday 21 April 2008

AstraZeneca shares up 7% after settling Ranbaxy patent suit

AstraZeneca PLC said it has settled a lawsuit against India's Ranbaxy Laboratories Ltd. in a pact that will keep Ranbaxy's generic copies of the blockbuster heartburn drug Nexium off the U.S. market until 2014 according the the Wall Street Journal. The settlement lifted a cloud hanging over AstraZeneca. The company's shares rose 7.1% on the London Stock Exchange on Tuesday. However, AstraZeneca also said it was awarding Ranbaxy some valuable contracts, saying that they were separate from the litigation settlement. Some analysts said the contracts could trigger questions from the U.S. Federal Trade Commission, which still must review the agreements. The commission has objected to some deals where it believed that a patent holder was giving a generic company something of value in exchange for staying off the market, arguing that this stymied competition and hurt consumers. Technically, Ranbaxy could have started selling generic Nexium in May, when a 30-month stay barring Ranbaxy from the market expired. But if Ranbaxy had started selling generic Nexium but lost the litigation, it would have had to pay AstraZeneca damages.

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