Lundbeck wins patent case

Denmark's second largest pharmaceutical company secures a court victory for its Lexapro patent, but new cases loom on the horizon

Investors in pharmaceutical concern Lundbeck breathed a sigh of relief last Thursday after the company emerged victorious from a long-contested patent case in the US.

A district court in Delaware upheld the patent held by Lundbeck and its US partner, Forest Labs, overruling the challenge of their competitor Teva/Ivax. During the trial, Teva/Ivax argued that the active drug in Lundbeck's anti-depressant drug, Lexapro, did not differ significantly from its predecessor.

Lundbeck's CEO, Claus Bræstrup, admitted he was happy with the result, but not surprised.

'We are of course pleased with the result, but we expected it. Our plans were based on us winning the case, and in that way, the decision does not make any difference,' Bræstrup told daily newspaper Jyllands-Posten.

Bræstrup admitted, however, that losing the case would have spelled trouble for Denmark's second largest pharmaceutical maker. The company earned DKK 2.6 billion on US sales of Lexapro last year.

'The reality is that if we lost the case, significant earnings from our US partner Forest would have dropped off, so we would have had to consider the future of our business operations.'

The positive outcome of the court case for Lundbeck boosted company stock, ending 4.5 percent higher when the markets closed last Friday.

Analysts argued that the ruling would bolster Lundbeck's ability to stave off future patent threats.

'Generic companies are naturally not interested in throwing away endless amounts of money on expensive court cases if they don't have the slightest chance of winning,' said Brian Kirk, an analyst for Sydbank.

The decision was also seen as a boon for Lundbeck by Frank Hørning Andersen, an analyst for Jyske Bank: 'If Lundbeck had lost the case in the US, then it would have been followed by similar cases in Europe. But I don't think we'll see a case in Europe before the patent has been negated in the US.'

Lundbeck is not in the clear, however. The company was already planning litigation against Caraco Pharmaceuticals for its plans to produce a copy of Lexapro.

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