Huge Court Win for Pfizer
Updated from 5:24 p.m. EST
Pfizer (PFE) beat back a challenge from India's Ranbaxy Laboratories after a judge upheld two of the New York-based company's U.S. patents on Lipitor, the top-selling prescription drug in the world.
The Delaware federal court decision sent shares of Pfizer higher by $2.69, or 11.9%, to $25.27 in after-hours trading Friday.
Lipitor, a cholesterol drug, had sales of $10.9 billion last year, accounting for roughly 24% of Pfizer's overall sales. Pfizer sold more than $4 billion worth of Lipitor in foreign markets and about $6.6 billion in the U.S. in 2004.Pfizer said Judge Joseph J. Farnan's ruling will entitle it to a permanent injunction prohibiting Ranbaxy from obtaining approval for or marketing its generic version of atorvastatin, the active ingredient in Lipitor, until 2011. "Today marks a major victory for medical innovators and the patients who depend on them for important new therapies," Pfizer Chairman and Chief Executive Hank McKinnell said in a press release. "We will continue to defend against any and all patent challenges that seek to undermine our mission of finding new therapeutic innovations for the patients we serve." Ranbaxy, a maker of generic drugs, has filed to contest Lipitor patents in several countries. In a case decided in October, a British court upheld the main Lipitor patent but declared a minor patent invalid. The main U.S. Lipitor patent doesn't expire until 2011. Pfizer said it would appeal the loss on the minor patent, which expires in July 2010. Ranbaxy was joined by another generic company, Arrow Generics, in challenging the 2010 patent. Ranbaxy has said it plans to appeal the decision on the main patent. Last March, Austria's patent office ruled in favor of Ranbaxy in a Lipitor lawsuit, a decision that Pfizer has said it will try to have overturned. Wall Street didn't seem too bothered by the Austrian ruling, but analysts in the past said that losses of the U.S. patents on Lipitor could be devastating for Pfizer and perhaps the larger pharmaceutical sector, making the Delaware ruling a tremendous victory for the company. Since Lipitor's introduction in 1997, more than 18 million people in the U.S. have been prescribed the drug. Lipitor is cleared in more than 70 countries. Recently, the Food and Drug Administration approved a new indication for Lipitor to reduce the risk of stroke, including in people who have diabetes.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV