US court victory triggers surge in Wellcome shares: Exclusive rights over anti-Aids treatment are confirmed

SHARES in the pharmaceutical group Wellcome surged 29p to 641p yesterday after it won a legal victory in America confirming its exclusive rights over Retrovir, its AZT Aids treatment.

Barr Laboratories and Novopharm, US companies that specialise in making generic versions of established drugs, had claimed that Burroughs Wellcome, Wellcome's US subsidiary, should have shared the patent on AZT with the US National Institutes of Health, the public health laboratories.

This was because Wellcome had sent coded samples of AZT to NIH for confirmatory analysis of its effectiveness before marketing the treatment under the brand name Retrovir.

NIH made no patent claims at the time, but subsequently Barr and Novopharm reached an agreement with it that they would pay royalties on sales of AZT if legal action against Wellcome was successful.

The District Court in New Bern, North Carolina, where the case was heard, comprehensively rejected the claims. It said there was 'overwhelming and conclusive' evidence that Wellcome had been the first to think of using AZT as therapy for patients infected with HIV.

Stopping the case early, Judge Malcolm Howard said there was no legally sufficient body of evidence on which a reasonable jury could have found against Wellcome. Assuming there is no appeal, the ruling means the validity of Wellcome's US patent has been confirmed and will be in effect until 2005.

Although the effectiveness of AZT has recently been questioned, particularly over its ability to delay the onset of full-blown Aids in patients who have tested positive for HIV, it remains a key treatment for the disease.

It is also increasingly used in combination with other drugs to treat Aids and HIV. As a result it is Wellcome's second-biggest-selling drug, worth pounds 213m a year to the company, around 13 per cent of its pounds 1.7bn turnover, and probably accounts for 10 per cent of the group's pounds 505m profits.

The US court's decision also gave a boost to shares in the drug giant Glaxo, whose blockbusting anti-ulcer drug, Zantac, faces a similar legal challenge in the US next month. They rose 13p to close at 534p.

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