The District Court in Eastern North Carolina said plans by Novopharm USA, part of NovoPharm Biotech, to produce a generic form of the drug did not infringe a key patent held by Glaxo. The ruling will not open the floodgates to a wave of Zantac lookalikes, as the patent does not run out until July 1997, having been extended by the US authorities from December 1995. But it brings closer the prospect of widespread cheap competition after the middle of next year and is likely to hit Glaxo's shares when the market opens today.
In March, when Glaxo chief executive Sir Richard Sykes warned of the threat of increased generic competition, the share price fell sharply.
A Glaxo spokesman said last night: "We have indicated on a number of occasions that there was the potential for generic competition come July 1997 and this [ruling] does not change that ... While disappointed by the judge's decision, the company believes it has a valid case against NovoPharm and strong grounds for appeal to the US Court of Appeals for the Federal Circuit."
The news comes as Glaxo Wellcome's anti-Aids drugs are expected to be boosted by promising results of trials due to be released this week at a meeting of specialists in Canada.
Findings presented at the 11th international conference on Aids in Vancouver, which started over the weekend, should confirm the efficacy of Glaxo Wellcome's Retrovir and Epivir drugs. But most excitement will be reserved for news of three-way combinations with other pharmaceuticals and the latest clinical trials of a new compound code-named 1592, which has the potential to be better than either of the anti-Aids drugs.