Fresh row at Galen over patent trial news

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The Independent Online

The hormone replacement therapy specialist Galen was embroiled in a new row over the disclosure of information yesterday, when it emerged that a vital patent dispute will come to court within weeks.

The Northern Irish drug group faces a showdown in a US court over Sarafem, its pre-menstrual tension drug that it acquired for £187m earlier this year.

The date of the trial - 12 November - is several months earlier than analysts and investors had expected, and it means that, in a worst case scenario, a copycat rival of the drug could be on the US market in early January.

The trial date was in fact set last year, which means it was known by Galen when it acquired Sarafem, but has never been disclosed. The company said last night that the date would have been available to investors who were willing to search through court filings in the southern district of Indiana.

In another revelation that will infuriate the City, a hearing on Sarafem took place in a US court on 21 July - a fortnight before Galen's recent results presentation to analysts, at which the company's management refused to answer questions on the litigation.

The Indiana judge refused summary judgment in the case, preferring to allow a full trial to go ahead. Galen is suing Teva Pharmaceuticals of Israel, which has said it is preparing to launch a generic version of Sarafem.

Frances Cloud, an analyst at Nomura and a long-time bear of Galen shares, said: "We have at least one significant event here that they knew about but didn't tell anybody."

Galen was criticised for not disclosing at the time of the Sarafem acquisition, from Eli Lilly, that Teva had filed for permission to launch a copycat version. The news only seeped out in the following months. Galen argues it need not disclose details of the battle against Teva since patent challenges are widespread in the drug industry and it is confident it has patents stretching to 2007 that will be upheld by the courts.