GlaxoSmithKline has reached a settlement agreement with Novartis and its affiliate companies over lawsuits related to GSK's bacterial strain used to manufacture Augmentin. The lawsuits were filed with the US International Trade Commission (ITC) and state courts in Colorado and North Carolina.

Under the terms of the agreement, GSK will receive single-digit percentage royalties on US sales of generic versions of Augmentin sold by Novartis or its affiliate companies from July 2002 through June 2006. Further details of the settlement agreement remain confidential. The termination of the ITC proceeding is subject to approval by the administrative law judge and the ITC.

The settlement does not affect the company's litigation relating to its Augmentin patents. The US Court of Appeals for the Federal Circuit heard the patent appeal case on March 5, 2003 and a decision is expected this year.

GSK's Pennsylvania state court lawsuit against Teva Pharmaceuticals and Ranbaxy Pharmaceuticals concerning the bacterial strain used to manufacture Augmentin is not affected by this agreement, and the company continues to pursue that separate action.