Sun Pharma reaches settlement with Pfizer on patent lawsuit, to pay $550 mn
Pfizer Inc said Teva Pharmaceuticals Industries Ltd and Sun Pharmaceutical Industries Ltd 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 per cent 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 drug maker, 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 Rs 584 crore, 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," Mr Kohli added.
Pfizer's shares were up about 1 per cent at $28.66 before the bell, while Teva's US-listed shares were down about 1 per cent at $39.51.
Sun Pharma ended little changed at Rs 980.70, while Takeda's stock closed down 1.4 per cent at 4,355 yen.