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Pfizer wins after 10 years, Teva & Sun to pay $2.15 billion

Staff writer |
Pfizer announced today a $2.15 billion settlement reached with Teva Pharmaceuticals and Sun Pharmaceutical Industries.

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The companies will pay for patent-infringement damages resulting from their "at-risk" launches of generic Protonix in the United States. The settlement comes after a nearly 10-year legal battle in which Pfizer and Nycomed (now part of Takeda) sought to enforce the patent for its blockbuster acid reflux medicine.

Pfizer and Takeda will divide the proceeds of the settlement with Pfizer receiving 64 percent.

"We are pleased with today's settlement, which recognizes the validity and value of the innovation that led to Protonix. Protecting intellectual property is vital as we develop new medicines that save and enhance patients' lives," said Amy W. Schulman, executive vice president and general counsel of Pfizer.

Under the terms of the settlement, Teva and Sun will pay a total of $2.15 billion to compensate Pfizer's subsidiary Wyeth and Takeda for the damages they suffered when Teva and Sun launched "at-risk" generic versions of Protonix prior to the January 2011 expiry of the patent for pantoprazole, the active ingredient in Protonix.

These "at-risk" launches were determined by a jury in New Jersey federal court to violate United States Patent No. 4,758,579, which is owned by Takeda and was licensed exclusively to Wyeth in the United States. The parties reached the settlement shortly after the commencement of a trial to determine damages in the same New Jersey federal court.

Teva will pay Pfizer and Takeda $1.6 billion and Sun will pay $550 million. Teva will pay $800 million in 2013 and the remaining $800 million by October 2014; Sun's entire payment will be made in 2013. As part of the settlement, both Teva and Sun have admitted that their sales of generic pantoprazole infringed the patent that was held valid by the court.

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