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Pfizer Wins Viagra Patent Infringement Case Against Teva Pharmaceuticals

A Pfizer Inc. (PFE) patent for the impotence pill Viagra is valid, a U.S. judge ruled, blocking Teva Pharmaceutical Industries Ltd. (TEVA) from marketing a generic version until 2019.

The decision, protecting Pfizer’s $1 billion a year in U.S. Viagra sales for most of the next decade, was handed down Aug. 12 after a two-week non-jury trial that began June 15, according to court papers.

“The pharmaceutical industry will take note” of the ruling, Navid Malik, a London-based analyst with Matrix Corporate Capital LLP, said in a telephone interview. “The generic companies are still going to be aggressive, but the pharmaceutical companies aren’t going to be easy touches, they’re fighting back.”

U.S. District Judge Rebecca Beach Smith in Norfolk, Virginia, ruled against Petach Tikva, Israel-based Teva, which claimed the patent wasn’t valid and couldn’t be enforced.

“Teva has not shown by clear and convincing evidence that the patent is invalid,” Smith said in a 110-page opinion. “There is utterly no evidence” to support Teva’s claim that that Pfizer intentionally withheld documents from the U.S. Patent and Trademark Office, Smith wrote.

Denise Bradley, a Teva spokeswoman, declined to comment on the ruling.

Viagra sales increased 1 percent in the second quarter from a year earlier to $495 million, Pfizer said this month. New York-based Pfizer, the world’s biggest drugmaker, posted net income of $8.26 billion, or $1.02 a share, last year on sales of $67.8 billion.

‘Innovative Core’

“Protecting the intellectual property rights of our innovative core is critical,” Amy Schulman, Pfizer’s general counsel, said in a statement. “Friday’s court decision acknowledges Teva’s clear violation of our patent rights.”

Teva fell 3 percent to 138.30 shekels in Tel Aviv. The company’s American depositary receipts, each representing one ordinary share, rose 79 cents, or 2 percent, to $40.49 at 2:55 p.m. New York time in Nasdaq Stock Market trading.

Pfizer gained 41 cents, or 2.3 percent, to $18.27 in New York Stock Exchange composite trading.

The ruling is worth about 3 cents to Pfizer’s 2012 per- share earnings and 6 cents to the company’s annual per-share earnings through 2019, Christopher Schott, a New York-based analyst for JPMorgan Chase & Co., said in a note to clients today. Teva will probably appeal, he wrote.

The ruling was “a surprise,” Bloomberg Industries analyst Asthika Goonewardene said in an interview.

“The patent was a method-of-use patent, and usually these don’t hold up that well in court for small molecular drugs,” Goonewardene said. “The court’s decision to uphold this patent means other filers wanting to enter in 2012 are not likely to do so then.”

The case is Pfizer v. Teva, 10-cv-128, U.S. District Court, Eastern District of Virginia (Norfolk).

To see the patent, click: 6,469,012.

To contact the reporter responsible for this story: Phil Milford in Wilmington, Delaware pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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