This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs