Schwarz Pharma's wholly-owned subsidiary Kremer's Urban Development Co. (KUDCO), the US generic drug business of the Schwarz Pharma Group, achieved a critical court victory for its generic version of AstraZeneca's blockbuster drug Prilosec (Omeprazole). A US District Court found that KUDCO's formulation of Omeprazole does not infringe AstraZeneca's patents. As a result of this decision KUDCO believes that it is currently the only company with a non-infringing generic version to Prilosec. KUDCO's formulation is unique and covered by several patents. In the same decision the court also found AstraZeneca's formulation patents to be valid.

Patrick Schwarz-Schuette, CEO of Schwarz Pharma AG stated: "We are very pleased with this outcome. Our US subsidiary KUDCO has always been very confident in its strong legal position. While the legal and regulatory situation is complex for all generic applicants, the ruling has opened for KUDCO a unique set of opportunities. KUDCO is currently evaluating how to make its product available to patients in the most expeditious manner. We expect that KUDCO's product launch would contribute substantially to the financial performance of the overall Schwarz Group and provide additional resources for further expansion of our business and our pipeline of innovative drugs."

KUDCO's product is a bioequivalent generic version of AstraZeneca's anti-ulcer drug Omeprazole, which sold in the U.S. under the brand name Prilosec for the treatment of gastric/duodenal ulcers, gastro-esophageal reflux disease (GERD) and erosive esophagitis. Prilosec is the second largest selling drug in the U.S. with sales of more than US-Dollar 3.7 billion in 2001.