Sometimes it’s better to agree to disagree and move on with business, and that’s exactly what Pfizer Inc. (NYSE:PFE) and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) did with lawsuit over Celebrex. The pharmaceutical giants announced today that they had settled their ongoing patent dispute over the painkiller Celebrex.
The settlement allows the Israeli pharma firm to introduce a generic version of Pfizer’s blockbuster painkiller Celebrex in December. Other details of the deal were not disclosed, but the deal settles Pfizer Inc. (NYSE:PFE)’s patent infringement lawsuit against Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA).
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According to Pfizer Inc. (NYSE:PFE)’s annual report, Celebrex, commonly used to treat arthritis pain and inflammation, produced $2.92 billion in sales in 2013.
Celebrex patent invalidation
Earlier this year, a federal court overturned a patent covering Celebrex, giving Pfizer’s rivals a chance to sell generic versions. The patent for the active chemical compound in Celebrex is scheduled to lose exclusivity on May 30th. Pfizer had indicated it would appeal the decision.
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) claims to be the first generic drug manufacturers to manufacture a cheaper version of Celebrex, which normally means 180 days of marketing exclusivity (ie, before other generics can be sold).
Sued other drugmakers
Pfizer Inc. (NYSE:PFE) has also sued several other drugmakers, including Mylan and Actavis, which are also seeking FDA approval to market generic versions of Celebrex. Analysts say similar mutually beneficial settlements with these firms could be forthcoming in the near future.
Pharmaceutical industry analysts say thisdeal is definitely a matter of intelligent compromise on both sides. “(The deal) helps them [Pfizer] to get through 2014 with a lot less competition,” Morningstar analyst Damien Conover explains. “As soon as other generics get in, (Pfizer’s) sales will erode even quicker.”
Conover says Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) was likely motivated to compromise by the legal risk surrounding another patent on Celebrex. “I think Teva was concerned about the second patent that potentially could hold, so to reduce the risk, they said they would launch later.”