GlaxoSmithKline has begun a vital US court battle to defend more than £1bn in annual sales of its most successful drug, the anti-depressant Paxil.
Lawyers for the pharmaceutical giant yesterday set out their arguments at the start of a trial in Chicago in which GSK alleges a smaller rival has infringed its patents.
Paxil sold in the UK as Seroxat had sales of £1.5bn in the first nine months of 2002, two-thirds of that in the US. An estimated 15 million Americans are treated for depression each year. The drug is also prescribed for panic attacks, anxiety, post-traumatic stress and obsessive compulsive disorder.
GSK is battling Apotex, a Canadian firm with plans to launch a subtly different version of the drug. Apotex says it either does not infringe GSK's patent on the main ingredient in Paxil, or that the patent which runs until December 2006 is not valid.
In trial papers, GSK says it could lose 80 per cent of its US sales of Paxil within weeks of a rival being launched. Investors fear a repeat of the disaster which befell Eli Lilly, the US giant, when its drug Prozac faced competitors in 2001. Prozac lost 70 per cent of its sales in a fortnight because doctors and medical insurers in the US demanded patients use the cheaper version.
The Apotex trial is seen as a guide to further trials elsewhere in the US against a slew of other companies with other versions of Paxil ready for launch. GSK's shares up 14p to 1,148p yesterday have lost a quarter of their value in a year, partly on fears that it could lose patent protection on Paxil. The company already faces a shortfall in earnings from next year because of a lack of new products to launch.
GSK is trying to increase sales of a new controlled-release version of Paxil, which has longer patent protection, before generic rivals become established.