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Glaxo opens court battle to defend Paxil patents against rival

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.