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Teva Settles Neurontin Case With Pfizer on Undisclosed Terms

Pfizer Inc. (PFE), the world’s biggest drugmaker, settled claims it had against Teva Pharmaceutical Industries Ltd. (TEVA) over generic versions of the Neurontin epilepsy drug, ending a trial that was under way in federal court.

Financial terms are confidential, Teva, the world’s biggest generic-drug company, said in a statement. Teva will be able to continue selling the copy under a license from Pfizer, according to a filing in the case. U.S. District Judge Faith Hochberg in Newark, New Jersey, who was presiding over the trial that began May 17, dismissed the suit today, according to the court docket.

Pfizer claimed that copies of the pill made by Teva and its Ivax unit, along with Actavis Group hf’s Purepac unit, infringe a patent that expires in 2017. The drugmaker was seeking compensation for profit it lost when sales plunged to $150 million in 2005 from $2.5 billion the previous year because of the low-cost competition.

The agreement covers Teva, its Ivax unit, and Actavis Group hf’s Purepac unit, which had an agreement with Teva over its Neurontin copy, said Chris Loder, a spokesman for New York-based Pfizer. He declined to provide any financial details.

Low-cost versions of Neurontin have been on the market since 2004. A federal appeals court in 2007 overturned a U.S. judge’s ruling that Teva and Ivax didn’t infringe Pfizer’s patent.

Off-Label Uses

The generic-drug companies also argued that Warner-Lambert Co., which Pfizer purchased in 2000, turned Neurontin into a blockbuster drug by illegally marketing it for uses not approved by the U.S. Food and Drug Administration. In 2004, Warner- Lambert pleaded guilty and agreed to pay $430 million to resolve U.S. criminal and civil allegations that it marketed Neurontin for so-called off-label uses.

The patent that was the subject of the trial is for a process to make gabapentin, the active ingredient in Neurontin, with fewer contaminants.

Ivax, then a standalone company, began selling a variation of the drug in August 2004. Purepac started selling its generic version in October 2004 with Teva after the companies agreed to share any potential legal costs.

The case is Warner-Lambert Co. v. Purepac Pharmaceutical, 00-cv-2931, U.S. District Court, District of New Jersey (Newark).

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net; David Voreacos in Newark at dvoreacos@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Allan Holmes at aholmes25@bloomberg.net

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