AstraZeneca loses Losec patent fight

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Astrazeneca, the UK's number two pharmaceuticals group, is to launch an appeal after the High Court ruled that two of the patents covering its biggest-selling drug are invalid.

The ruling gave the group's shares a jolt and left analysts fearful the company could lose a similar, and much more significant, court battle in the US.

The court agreed with Cairnstores and Generics UK, two groups which want to make a copycat version of the ulcer drug Losec, that patents covering AstraZeneca's method of formulating the drug should not stand.

The active ingredient in Losec lost its patent protection last year, but AstraZeneca is fighting to defend patents on the way it makes the drug.

Losec, a treatment for stomach acid-related disorders such as ulcers, is one of the world's biggest selling drugs, with more than £10m-worth sold every day. It accounts for 40 per cent of AstraZeneca's turnover and analysts predict sales will slide dramatically after the arrival of competition. The UK case is one of 71 Losec patent disputes outstanding throughout the developed world. Although the UK accounts for just 5 per cent of Losec sales, Martin Nicklasson, head of the gastro-intestinal franchise at AstraZeneca, said the company would appeal. "We are disappointed by this judgment and remain confident that the decision can be overturned on appeal."

One of the formulation patents ruled invalid yesterday is similar to one of the five patents at the heart of a case being heard in the US. In that battle, which has taken more than four months of court time already, AstraZeneca is suing four companies which are gearing up to launch generic Losec in the world's most significant drug market. AstraZeneca's shares have risen strongly in recent weeks as observers in the courtroom believe the case has been going against the generic drugmakers.