Glaxo boosted by US patent ruling on anti-depressant drug
Tuesday 31 December 2002
Glaxosmithkline raised hopes it could head off potential rivals to one of its top-selling drugs yesterday and reassured investors by repeating its earnings guidance.
Europe's biggest drug maker said a US judge had ruled in its favour on one patent related to its anti-depressant drug Paxil, but had also decided in favour of the private Canadian company Apotex on another.
The company said the judge for the Eastern District of Pennsylvania had split the decision on the remaining two disputed patents, holding some claims in the patents invalid and denying Apotex's motions on others.
GSK, which is battling against cheap generic versions of its blockbuster drugs, said it would seek an appeal against the ruling that one patent was invalid. The dispute over the remaining three patents will go forward to a court case.
"Glaxo continues to believe there are significant hurdles that prevent launch of a generic Paxil product," the company said. "Accordingly, Glaxo's published earnings guidance for 2002 and 2003 remains as previously stated."
The company expects to deliver growth in earnings per share of at least 10 per cent in 2002 and high single-digits in 2003, assuming it successfully defends its Paxil patents.
Steve Plag, pharmaceuticals analyst at Credit Suisse First Boston, said: "This is clearly very good news as it means the second patent case now goes to trial in one of the slowest courts in the US, which should mean no resolution to the Paxil case until the end of 2003 at the earliest."
The shares rose 27p to 1,147p.
Paxil, which belongs to the same class of anti-depressants as Prozac, sold by Eli Lilly, has been a huge commercial success for GSK, generating global sales of £1.86bn last year.
Another analyst said the news was mildly positive for GSK. "If they had lost all four patents, Apotex would probably have just launched their product.... This was potentially very negative and that's been removed now for another six months," the analyst said.
Glaxo is also pursuing another case against Apotex in Chicago over its patent covering the hemihydrate form of Paxil, which expires in 2006.
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