Teva to Pay $1.6 Billion to Settle Pfizer Patent Suit

Court ruled Teva, Sun sold generic heartburn drug Protonix before U.S. patent expired.

Reuters
Reuters
Reuters
Reuters

Pfizer Inc. said Teva Pharmaceuticals Industries and Sun Pharmaceutical Industries would pay $2.15 billion to settle a patent infringement lawsuit related to its acid-reflux drug Protonix.

Japan's Takeda Pharmaceutical Co Ltd, Pfizer's partner on the drug, will receive 36 percent or about $774 million from the settlement.

Pfizer won a protracted 10-year legal battle in April 2010 when a New Jersey jury ruled that Teva had infringed the Protonix patent. Teva started selling a generic version of the drug in 2007.

A trial to determine damages began on Monday.

The patent was held by Nycomed - now a Takeda subsidiary. Protonix was licensed to Wyeth, which is now owned by 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.

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 final settlement.

"This is not a very positive out-of-court settlement. The agreed amount is way too high for such a settlement," said Daljeet Kohli, head of research at brokerage IndiaNivesh in Mumbai. "It will also restrict Sun's ability to look for acquisitions."

Pfizer's shares were up about 1 percent at $28.66 before the bell, while Teva's U.S.-listed shares were down about 1 percent at $39.51.

Jeremy Levin, Teva CEO, sees happy future for Teva in China.Credit: Reuters

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