Drugmaker AstraZeneca had the European patent for its best-selling heartburn treatment Nexium revoked, a spokesman for the European Patent Office said.
Rainier Osterwalder, a spokesman for the Munich-based agency, said the decision, which is final, means the company can no longer hold the patent on the lucrative drug.
"It's a final one. You can't remedy that," he said. No reason was given for the decision, which was handed down by an administrative board.
Private generic drugmaker Ratiopharm International had challenged the patent, which led to the decision.
The news sent AstraZeneca shares down 4.9% to 2,724 pence ($53.17) on the London Stock Exchange.
The drug is a key revenue driver for AstraZeneca. Last year, worldwide sales reached $4.6 billion, of which $1.1 billion came from Europe.
In a statement, AstraZeneca said that the decision affected only one of the patents, and that was set to expire in 2014.
"While disappointed with the EPO decision, AstraZeneca has confidence in the intellectual property portfolio protecting Nexium," the company said. "This portfolio includes process, method of use and additional substance patents with expiration dates ranging from 2009 through to 2019. In addition to these patents Nexium has data exclusivity valid to 2010 in major European markets."
A second hearing is scheduled for March 7 on another patent issue involving Nexium and the company pledged to defend it.
"AstraZeneca will defend and enforce its intellectual property rights protecting Nexium," the company said.