March 3 (Bloomberg) -- Bayer AG's patent on the birth control pill Yasmin was invalidated by a federal judge in New Jersey in a victory for generic-drug maker Barr Pharmaceuticals Inc. Barr rose as much as 14 percent in extended trading.

Bayer said it may appeal today's decision and is evaluating the effect of the court's ruling on the Yaz birth control pill, a related drug that was approved for sale in the U.S. in 2006 and is protected by the same patent. Bayer said it has marketing exclusivity on Yaz until March 2009.

Yasmin sales in the U.S. were $488.1 million last year. The family of contraceptives that includes Yasmin and Yaz generated $1.58 billion in 2007 sales for Leverkusen, Germany-based Bayer. The line of contraceptives is the company's best-selling pharmaceutical product, Bayer said Feb. 28.

``Bayer disagrees with the court's decision and will consider its legal options in this regard,'' Bayer said in a statement. ``The company will continue to vigorously defend its intellectual property.''

Woodcliff Lake, New Jersey-based Barr, the second-biggest U.S. maker of birth-control pills behind Watson Pharmaceuticals Inc., is seeking to sell a generic version of Yasmin.

``Clearly, this is a positive development for the company, and we are evaluating what the potential impact could be on our earnings guidance for 2008,'' Barr Chairman Bruce Downey said in a statement.

Shares

Barr rose as high as $51.90 in extended trading after closing at $45.67, down $1.48, on the New York Stock Exchange. Bayer's American depositary receipts, each representing one ordinary share, were unchanged at $76.35 after the close in over- the-counter trading.

The patent, which expires in 2020, is on a formula for the compound drospirenone in which the particle size was reduced so it could be absorbed by the body more quickly before it is exposed to stomach acid. U.S. District Judge Peter Sheridan agreed with Barr that the decision to reduce the particle size would have been obvious to any researcher.

The case is Bayer Schering Pharma AG v. Barr Laboratories Inc., 05cv2308, U.S. District Court for the District of New Jersey (Newark).

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net; Jeff St.Onge in Washington at jstonge@bloomberg.net

Last Updated: March 3, 2008 18:17 EST