Galen in pact with US rival to end patent wrangles

Galen, the women's healthcare group, has tied up a wide-ranging and innovative deal with its US rival, Barr Laboratories, that ends most patent litigation between the pair and fends off copycat competition to several of its important drugs.

Galen shares jumped 8 per cent to 657.5p on the news, which analysts said removed a number of the competition fears that have dogged the stock this year.

Barr, which attempted to buy Galen earlier this year, is paying $45m (£28m) to acquire one off-patent contraceptive and the right to sell generic versions of two hormone replacement therapies shortly before their patents expire later this decade.

The deal settles patent litigation between the two companies over the HRT treatments Estrostep and femhrt, protecting Galen's exclusivity - and, hence, its high margins - over the products until 2007 and 2009 respectively.

There is also an innovative deal on Ovcon, Galen's most important contraceptive pill. Barr has lined up a cut-price copy of the drug, but Galen has bought an option to sell it on Barr's behalf. This would ensure the price is not eroded at least until Galen is able to launch an improved, patent-protected version of the drug.

Both companies have received advice from their lawyers that the deal will not fall foul of competition authorities in the US, who have previously shown themselves ready to use anti-trust laws to hasten the switch from branded drugs to cheaper copies.

Loestrin, the contraceptive pill that is being sold to Barr, was not being actively marketed by Galen, according to the chairman, John King. Loestrin, which was acquired from Pfizer this year, already faces generic competition and had sales of $16.7m (£10.5m) in the last three months.

Dr King said: "This deal has removed three of the risk factors that have been hanging over us. We have always taken a robust attitude to patent rights and we are confident in our ability to defend other patents."

There is still one outstanding issue between Barr and Galen, over the patents for Sarafem, a treatment for severe menstrual tension which Galen bought last year and whose patents are being challenged by Barr. The two are scheduled to clash in a US court in November.

Galen has repeatedly been criticised for providing only limited information on the existence and progress of its patent disputes.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific