GlaxoSmithKline (LSE:GSK) last Thursday accused Israel's Teva Pharmaceuticals (Nasdaq:TEVA) ( TEVA), Novartis (NOVZn.VX), and India's Ranbaxy of using stolen bacteria to make generic versions of augmentin.

"It's a nonissue for us. We see nothing to be concerned about," a Teva spokesperson told TheMarker on Sunday.

Ranbaxy also denied the allegations. Analysts largely concur that the legal ploy is original, but that it probably will not help Glaxo protect any rights it may have regarding the antibiotic.

Augmentin has been a key pillar of Glaxo's earnings for years, hence its urgency to brandish any sword it can, however brittle its mettle. Last year augmentin brought Glaxo £1.4 billion about $2.1 billion. Competition will therefore hit where it hurts the bottom line. Analysts see Glaxo's net growth dropping to 10% next year, from 13%, if it loses its exclusivity over the drug.

Glaxo is not accusing the three companies of stealing into its facilities and making off with the bugs, which, it claims, were stolen by one of its own employees. But it claims that the three firms made use of heisted germs to develop their generic versions of augmentin.

Whether or not the bacteria were stolen, however, Glaxo has no patent on them in any case. The bacteria produce a key component of augmentin, clavulanic acid.

This is not Glaxo's first legal skirmish over augmentin. In December 2001 the company lost a case to Teva, and in April the Israeli drugmaker won another round in the courts, which threw out Glaxo's patent claim. Shortly thereafter Novartis announced U.S. Food and Drug Administration approval to market the generic version of the drug. Teva is thought to be close to announcing parallel approval.

Deutsche Banc recently upped its assessments of Teva based on the assessment that it will start marketing augmentin soon. Analysts expect the drug to become one of Teva's three key money-makers in the next three years, generating up to around $700 million revenue a year.

Bank Hapoalim's Rakefet Levison-Apter estimated earlier this month that Teva's third-quarter sales will be $595 million, up 18% from the same quarter of last year unless it gets the FDA nod for Augmentin, which should boost its results.

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