Federal court backs Teva Pharmaceutical patents behind MS treatment Copaxone

Shares of Teva Pharmaceutical Industries Ltd. climbed Monday in the first trading day after a U.S. federal court reaffirmed patents protecting the drugmaker's biggest brand-name product, the multiple sclerosis treatment Copaxone.

The Israeli company said Saturday the decision from the U.S. District Court for the Southern District of New York covers several patents, the last of which expires in 2015, and that it prevents other drugmakers from selling their versions of the drug until then.

It also said the decision should prevent the Food and Drug Administration from approving generic versions of the drug until 2014.

U.S.-traded shares of the company rose 4.5 per cent, or $1.71, to close at $39.72, while the Standard & Poor's 500 index fell 1.6 per cent.

Teva had sued Mylan Laboratories Inc., Momenta Pharmaceuticals Inc., Sandoz Inc. and Natco Pharmaceuticals, accusing the rival companies of infringing on patents covering the drug's chemical composition, method of use and the manufacturing process behind the product.

Teva is the 10th largest global pharmaceutical company, according to drug data firm IMS Health, and Copaxone is its main brand-name offering. It expects $3.8 billion in sales this year from the drug. Teva is primarily a maker of generic drugs.

The ruling removes a major uncertainty hanging over Teva shares, Credit Suisse analyst Michael Faerm wrote in a note to investors. The analyst called it a "resounding victory" for Teva.

"Although a majority of investors expected a Teva win ... the magnitude of the potential impact of a loss to Teva's earnings and share price kept many investors on the sidelines, and this event will likely bring some of them into the stock," Faerm wrote.

Cambridge, Mass.-based Momenta said in a separate statement that it intends to appeal. Its shares tumbled $3.81, or 22 per cent, to $13.20.

Mylan, based in Canonsburg, Pa., said in a brief statement it intends to evaluate its options for appeal. It added that the decision does not affect its earnings guidance. Its stock dropped 43 cents, or 2 per cent, to $20.80.

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Federal court backs Teva Pharmaceutical patents behind MS treatment Copaxone