AstraZeneca Loses Ruling Over Patent for Toprol-XL

AstraZeneca Plc lost a court ruling that opens the door to generic competition for its blood-pressure treatment Toprol-XL.

A U.S. appeals court in Washington said today a patent on the drug is invalid because the compound is already covered by another patent. The ruling is a victory for Novartis AG's Eon Labs, KV Pharmaceutical Co. and Watson Pharmaceuticals Inc.'s Andrx unit.

``We're disappointed with the ruling on double-patenting,'' AstraZeneca spokesman Blair Hains said. ``We're reading the ruling and will evaluate what our future steps will be.''

U.S. sales of Toprol-XL contributed $331 million, or 13 cents a share, in the first quarter to London-based AstraZeneca's revenue. The company's forecast for the rest of 2007 doesn't include the drug. Lehman Brothers estimates U.S. sales of Toprol-XL will plunge to $100 million in the third quarter and to nothing in the fourth quarter because of generic competition.

A 25-milligram dose of the medicine has had generic-drug competition since November from Eon, now part of Novartis's Sandoz generic-drug unit. It also is sold as a so-called authorized generic, the brand medicine without the label.

In May, the U.S. Food and Drug Administration approved Sandoz's application to sell Toprol-XL in a 50-milligram dose. Spokeswoman Rachel Spielman said the company isn't yet selling Toprol-XL in the 50-milligram form. She declined to comment further.

Sandoz Shares Profits

In May, Watson sold Sandoz its rights to be the first to sell generic Toprol-XL in a 50-milligram dose. In return, Watson gets a share of profits from Sandoz.

The FDA also approved KV Pharmaceutical's request to sell the drug in 100-milligram and 200-milligram doses.

In today's ruling, the U.S. Court of Appeals for the Federal Circuit said in a 2-to-1 decision that one of the patents for the drug covers the same thing as a different patent that expired.

The court sent the case back to a lower court to determine whether the invalidated patent and a third patent also should be deemed unenforceable. Those deliberations, which won't block rivals from selling generic versions, might determine legal fees in the case.

AstraZeneca's American depositary receipts, each representing one ordinary share, fell 4 cents to $55.55 in New York Stock Exchange composite trading.

Novartis ADRs, each worth one ordinary share, fell 30 cents to $54.69. Shares of Watson Pharmaceuticals, based in Corona, California, rose 37 cents to $33.05. St. Louis-based KV Pharmaceutical's shares fell 2 cents to $28.78.

The case is In Re Metoprolol Succinate Patent Litigation, 06-1254, U.S. Court of Appeals for the Federal Circuit (Washington).

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