Shares of drugmaker
were falling 7.7% in premarket trading on news that the company's patents for one of its top-selling drugs have been invalidated by a U.S. judge, setting the stage for generic competition.
The judge ruled in favor of generic drug makers
by invalidating the three remaining GSK patents for Augmentin, which had been set to expire in June, July, and December of 2002.
In a press release, GlaxoSmithKline said it continues to believe its patents are valid, and the company plans to appeal both this ruling and the prior one that invalidated patents set to expire in 2017 and 2018. The company also warned that it plans to pursue damages to recover lost profits if any generic drugs are introduced prior to a successful appeal.
GlaxoSmithKline reiterated its earnings guidance of EPS growth in the mid-teens for 2002, but said if a generic version of Augmentin was introduced as early as July 2002, it would drop those estimates to 10% growth for the year.
Company CEO J.P. Garnier said, "We are clearly disappointed with the court's decision. We have provided this additional EPS guidance in order to be clear on the impact should a generic Augmentin be launched before the appeal, although I should emphasize that there is no certainty whether this will ultimately occur."
Shares of the drug company were recently trading at $42.80 on the Instinet platform after closing at $46.39 before the news Thursday.