Medicis Settles Solodyn Patent Lawsuit With Sandoz

SCOTTSDALE, Ariz. (AP) — Medicis Pharmaceutical Corp. said it settled a lawsuit that alleged Sandoz, a unit of Novartis AG, infringed on a patent supporting Medicis's acne drug Solodyn ER.

Sandoz challenged the patent in the hope of bringing its own generic version of the drug to market. Medicis said the generic violated the patents on the original Solodyn ER. In a filing with the Securities and Exchange Commission Tuesday, Medicis said it dropped all litigation after Sandoz acknowledged the patents on Solodyn ER are valid and enforceable.

Acne drugs such as Solodyn ER bring in most of the company's revenue.

Sandoz will not ship any more of its version of the drug until November 2011, and starting then, it will have the option to sell a licensed generic. Medicis settled similar cases with Impax Laboratories Inc. and Teva Pharmaceutical Industries Ltd. earlier this year, and it is still in court with Mylan Inc.

Medicis shares rose 33 cents to $18.50 in afternoon trading.

In a note to clients, Cowen and Co. analyst Ken Cacciatore upgraded Medicis stock to "Outperform" from "Market Perform." He said the company should be able to settle the challenge from Mylan on similar terms. Medicis's decision to grant the challengers the right to make a licensed generic version allows Medicis to keep some of the revenue from sales after its patent expires, Cacciatore wrote. He estimated Medicis will be able to keep 30 percent to 35 percent of Solodyn revenue after the generics reach the market.