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In a move that spells good news for Israel's

Teva Pharmaceuticals (Nasdaq:TEVA) (TASE:


), the shareholders of Slovenia's Lek Pharmaceuticals rejected the terms of a takeover by Geneva, a unit of the Swiss pharma empire Novartis.

At the end of August, Novartis said it was buying Lek, which is traded on the Slovenian stock exchange, for $800 million.

A key goal of the merger was Lek's production of a generic version of Augmentin, a blockbuster antibiotic over which the world's biggest drug companies have been fighting tooth and claw after GlaxoSmithKline's (LSE:GSK) patent expired.

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However, in a special assembly of shareholders, only 42% of the participants okayed the takeover. A majority of 75% would have been required for the deal to proceed.

Teva is still waiting for U.S. Food and Drug Administration approval to market the generic version of Augmentin, while Glaxo for its part is still struggling to retain rights to the medication, the brand version of which commands a $2 billion market in the United States.

Lek is also still waiting for permission to market its product in the U.S.

Geneva has permission to sell the drug, as does Indian pharma Ranbaxy. But Ranbaxy has said it will wait for the results of Glaxo and Geneva's court case before starting to sell.

The failure to buy Lek will hamper Geneva's efforts to increase its market share of generic Augmentin, says Leader & Co analyst Ori Hershkovitz, which increases Teva's chances of success in the antibiotic's market.

Analysts see generic Augmentin raising Teva's revenues by about $200 million a year, or 50 cents per share.