Pfizer (PFE) has settled for $2.15 billion with Teva Pharmaceuticals (TEVA) and Sun Pharmaceuticals for patent infringement damages on acid-reflux drug Protonix, according to the company’s website.
Israel’s Teva, the world’s largest generic drug maker, began selling a generic version of Protonix in 2007, but a court ruled in 2010 that Teva had infringed on Pfizer’s patent. Wednesday’s settlement finally marked the end of the 10-year legal battle and helped avoid a lengthy trial.
Pfizer’s executive vice president Amy W. Shulman announced on the company website, “We are pleased with today’s settlement, which recognizes the validity and value of innovation that led to Protonix.”
Pfizer also announced that it would receive 64 percent of the $2.15 billion settlement, while the remaining 36 percent will go to Japan’s Takeda Pharmaceutical Co., Pfizer’s partner on the drug. Teva is on the hook for $1.6 billion and the India-based Sun will pay $550 million.
Teva was well prepared for the legal hit, as the company set aside $2.07 billion to resolve the case according to CNBC. However, the India-based Sun only set aside $100 million for potential losses, and must now hand over five and a half times that amount.
Pfizer shares reacted positively the news, rising 0.40 percent to $28.53 despite a significant pullback in the broader market.
Meanwhile, Teva shares traded down 1.96 percent to $39.05 on Wednesday. The stock has been a perennial laggard and one of the worst performers in the entire healthcare industry over the last two years. Shares are down almost 20 percent, while shares of rivals Pfizer and Merck (MRK) have soared almost 40 percent during the same timeframe.
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