A Friday, July 14, 2006, article by Stephen Simpson at The Motley Fool reports on "The Diverging Fortunes of Forest and Teva." He writes:
For most of 2005, it seemed like pharmaceutical company Forest Labs (NYSE: FRX) couldn't buy a break and generics company Teva Pharmaceuticals (Nasdaq: TEVA) couldn't do much wrong. For this year, though, it seems like things are finally going Forest's way, while Teva is finding itself in a run of bad luck.
Last night a federal court ruled in favor of Forest Labs and determined that the company's patent for Lexapro was valid and enforceable, and that Teva's attempt to market a generic version of escitalopram (the active ingredient for this anti-depressant) constituted infringement. That's a big deal for Forest -- Lexapro was over 60% of the company's revenue last quarter and there is nothing in the way of new drugs that could immediately replace the revenue that Forest would have lost if Teva had been allowed to market its generic product.
For Teva, this is a setback, but one that largely goes with the territory. When you make a big chunk of your living through legal attempts to overturn and invalidate patents, you're going to lose cases.
Things have finally started looking up for Forest. True, they may face an appeal from Teva and they recently filed suit against Caraco Pharmaceutical (AMEX: CPD) for another infringement on Lexapro. But at least the company's pipeline is fuller than it was a year ago -- including a drug for COPD, an antibiotic, and a licensing agreement with Mylan Labs (NYSE: MYL) for the hypertension and heart failure drug nebivolol.
Read the full article here.
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