Double loss gives Glaxo a headache

Glaxo Wellcome suffered a double blow yesterday after losing a key patent battle in the US and seeing a drug it largely developed launched by a rival.

The news that Novopharm, a Canadian drugs group, has won permission from a US court to market a rival to Zantac, the UK group's best-selling anti- ulcer drug, coincided with an announcement from rival Zeneca that it was launching Zomig, a migraine treatment which Glaxo was forced by US regulators to sell in September. But the damage had been anticipated by dealers and Glaxo's shares dipped only 4p to pounds 10.86 yesterday.

A Federal appeal court ruled on Friday that Novopharm's application to market a non-patented form of Zantac did not infringe Glaxo's so-called form 2 version of the drug, over which it will continue to hold a US patent until 2002. The unsuccessful appeal, which followed a decision against Glaxo in a US district court in North Carolina almost a year ago, means that much cheaper generic forms of Zantac will go on sale when the US form 1 patent runs out in July. Novopharm said it was also ready to launch a generic form of Zovirax, Glaxo's big-selling shingles and genital herpes drug.

The British company is unlikely to appeal further in the Novopharm case and was yesterday playing down the effects of the ruling. A spokesman said: "We have been saying for some time we have been anticipating generic competition."

At the time the company announced its annual results last month, Sir Richard Sykes, chief executive, warned that US sales of Zantac could slump by as much as 80 per cent in the 12 months after the patent expired in July. But he went out of his way to allay City fears about the prospects for the group, saying he expected earnings to be "at least maintained" over the next two years.

Analysts largely agreed that the ruling had done little to change market expectations. Fraser Hall at Barclays de Zoete Wedd said forecasters had been expecting multiple generic competition from July and the only question was whether Glaxo could limit its competitors to, say, two or three, rather than the six to eight expected. He said the group was likely to continue its legal battle against other potential generic producers.

The court setback for Glaxo should bring a multi-million pound windfall for Holliday Chemical, a Huddersfield-based company, whose main Spanish subsidiary makes the chemicals used in the manufacture of ranitidine, the generic name for Zantac. Holliday, which supplies both Novopharm and other generic drug manufacturers, saw its shares rise 13p to 152p yesterday after its chairman, Michael Peagram, said the launch of generic competition could be worth "several million pounds extra profit in the current year." The Zovirax move is seen as less significant. Whereas more than half last year's total Zantac sales of pounds 1.95bn were in the US, less than two- fifths of Zovirax sales were there, making the effects of generic competition on the drug there less severe.

PROMOTED VIDEO
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Arts and Entertainment
arts + ents
News
Morrissey pictured in 2013
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Financial Analyst - Forecasting - Yorkshire

£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

Business Architect - Bristol - £500 per day

£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices