AstraZeneca Plc has experienced a surge in its share price after the pharmaceutical firm reported it had settled a patent lawsuit with Ranbaxy Laboratories Ltd.
The deal will delay the Indian company’s release of a generic version of AstraZeneca’s best selling heartburn drug.
AstraZeneca said it was not changing its financial guidance for 2008 following the settlement, but the company’s shares shot up almost 9% as analysts said risks to the London-based drug maker’s earnings had been reduced.
Ranbaxy had submitted an application to the FDA to make a generic version of esomeprazole magnesium, the active pharmaceutical ingredient in heartburn medicine Nexium, and would have been free to start selling a generic version of the drug in the US after April 14, when a 30-month stay barring it from the market expired.
However, under the new agreement, it will not begin sales of a generic version of the drug until May 27, 2014.
The 2014 date marks the expiration of two of AstraZeneca’s six patents on the drug, which Ranbaxy conceded were all valid and enforceable. The other patents expire between 2014 and 2019.
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