Forest Labs' Rights Affirmed in Lexapro Appeal

Forest Laboratories Inc. has prevailed in a dispute over the validity of a patent on the its Lexapro anti-depressant. Shares of the drugmaker surged 9.9% to $41.63 Wednesday on the news that the U.S. Court of Appeals for the Federal Circuit affirmed a July 2006 decision by the U.S. District Court for the District of Delaware that determined that the U.S. patent covering escitalopram, the active ingredient in Lexapro, is valid. It also upheld an injunction that prevents generic drug maker Teva Pharmaceutical Industries Ltd. and Cipla Ltd. from launching generic versions of the product until the patent expires in 2012. The court, however, modified the order against Teva to only include escitalopram oxalate, the chemical name for Lexapro, which had $2.1B in sales last year, representing 61% of Forest's revenue. Separately, a U.S. district judge granted Teva approval to launch a generic version of Novartis AG's Famvir for genital herpes. Teva shares added 0.3% to $43.74.

Sources: AP, Reuters, Bloomberg
Commentary: Lexapro Maintains Market Share • Forest Labs: How Long Will These Strong Profits Last?
Stocks/ETFs to watch: FRX, TEVA, NVS, PPH, IHE. Competitors: LLY, GSK, PFE
Earnings call transcript: Forest Laboratories F1Q08 (Qtr End 6/30/07)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.