Wellcome attacks rival over patent

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The Independent Online
WELLCOME yesterday moved to protect sales of its best-selling Zovirax anti-viral drug with the launch of legal action in the US against a main rival, SmithKline Beecham.

Wellcome alleges that Famvir, SmithKline's anti-viral drug, which was launched in the US last month, is almost identical to Zovirax and so infringes its patent.

The action is unusual because Wellcome is accusing SmithKline of breaching the spirit rather than the letter of the law. It is relying on a clause in patent law which says that anyone who copies the essence of a product will not escape liability by changing one or two elements of it.

It also accuses SmithKline of infringing its patent on the method of delivering the drug, is asking for an injunction against the sale of Famvir in the US, and is claiming unspecified damages. It is asking for the case to be heard by a jury rather than a judge, as is more normal in patent infringement cases. SmithKline denied any patent infringement and said it would defend itself against any action.

Analysts saw the action as evidence of a new aggressiveness at Wellcome - and of the importance of Zovirax to its profits. In the year to August, worldwide sales of Zovirax were pounds 760m from a total of pounds 2bn, and it is estimated that the US accounts for about 42 per cent of that. Analysts believe the drug could account for as much as 45 per cent of Wellcome's profits.

Famvir was launched in Britain in January and SmithKline claims it has already taken 25 per cent of the market for shingles, one of the main diseases treated by Zovirax, despite being offered at a similar price to Zovirax. Almost all that share is likely to have come from Wellcome, as there is no alternative treatment.

Wellcome is trying to boost the strong growth of Zovirax sales by offering over-the-counter versions - for example for cold sores in Britain and genital herpes in the US, where it is still awaiting approval.