Lilly Gains on Zyprexa Patent Win
Updated from April 14
Shares of Eli Lilly (LLY) rose early Friday after a federal judge late Thursday ruled in favor of the drugmaker in a patent challenge by three companies to its top-selling drug Zyprexa.
The judge said the three challengers failed to prove the patent was invalid or unenforceable.
The stock was up $1.63, or 2.8%, to $58.75 in premarket trading."We have always been very confident that our patents are valid and enforceable and today's court ruling sends a clear message on the strength of those patents," said Sidney Taurel, Lilly's chairman, president and chief executive. Most analysts predicted Lilly would win the case, protecting the U.S. patent on an antipsychotic drug that produced $4.4 billion in worldwide sales last year, including $2.4 billion in the U.S. Zyprexa accounted for 32% of the company's total sales last year, and analysts say it contributes to an even greater percentage of operating profit. A Lilly loss would have crushed the stock and hurt annual earnings for the rest of the decade, analysts have said during the long patent battle. Some also have viewed the case as a litmus test for the enforceability of other pharmaceutical patents. On Thursday, nervous investors traded more than 15.8 million shares, or about five times the average daily trade for the past three months. The key Zyprexa patent was challenged by three companies -- Ivax (IVX), Teva Pharmaceutical Industries (TEVA) and Dr. Reddy's Laboratories (RDY). They argued that the patent, which Lilly says remains in force until 2011, was invalid. In premarket trading, shares of Ivax lost 73 cents, or 4%, to $17.75; shares of Teva were up 2 cents at $32.15; while shares of Dr. Reddy closed at $17.05 Thursday. Lilly had been fighting these patent challenges since 2001. Subsequently, the lawsuits were consolidated before a federal judge in Indianapolis, Lilly's home town. As an indication of the case's complexity, the actual trial was held in January and February of last year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV