Pfizer in $2.15 Billion Settlement From Teva and Sun for Patent Infringement
Pfizer settled a nearly 10-year battle Wednesday, announcing a $2.15 billion settlement with Teva Pharmaceuticals Industries and Sun Pharmaceutical Industries for patent infringement on its acid-reflux drug Protonix.
Japan's Takeda Pharmaceutical Co Ltd, Pfizer's partner on the drug, will receive 36 percent or about $774 million from the settlement.
Pfizer won a protracted 10-year legal battle in April 2010 when a New Jersey jury ruled that Teva had infringed the Protonix patent. Teva started selling a generic version of the drug in 2007.
A trial to determine damages began on Monday.
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The patent was held by Nycomed—now a Takeda subsidiary. Protonix was licensed to Wyeth, which is now owned by Pfizer.
Israel-based Teva, the world's largest generic drugmaker, will pay $1.6 billion—half this year and the rest by October 2014. India's Sun Pharma will pay $550 million this year.
Teva said in February that it may face legal losses of up to $2.07 billion to resolve the case.
Sun Pharma set aside 5.84 billion rupees, or about $100 million, last November towards potential damages to Pfizer. The company will now have to shell out a further $450 million as final settlement.
"This is not a very positive out-of-court settlement. The agreed amount is way too high for such a settlement," said Daljeet Kohli, head of research at brokerage IndiaNivesh in Mumbai. "It will also restrict Sun's ability to look for acquisitions."
Pfizer's shares traded up about 1 percent at $28.66 before the bell, while Teva's U.S.-listed shares were down about 1 percent at $39.51. Sun Pharma closed little changed at 980.70 rupees, while Takeda's stock closed down 1.4 percent at 4,355 yen.
—Reuters contributed to this report.