The United States District Court for the District of New Jersey ruled that AstraZeneca’s US Patent No. 6,598,603 (the ‘603 patent), protecting Pulmicort Respules in the US, is invalid. The Court further ruled that the generic defendants involved in the litigation do not infringe AstraZeneca’s second patent, US Patent No. 7,524,834 (the ‘834 patent).

“AstraZenca strongly disagrees with the Court’s decision,” said Paul Hudson, executive vice president, North America. “AstraZeneca has full confidence in the strength of its intellectual property rights protecting Pulmicort Respules.  AstraZeneca is considering next steps, including an appeal of the Court’s decision.”

The decision is limited to the US and has no impact on the validity of patents related to Pulmicort Respules in other countries. This decision will not change AstraZeneca’s revenue guidance for 2013, which is that the company anticipates a mid to high-single digit decline in revenue on a constant currency basis (Full Year 2012 Pulmicort Respules  US sales were $136 million).  In the event that additional generics enter the market, this would materially impact royalties received on sales of Teva’s generic version of Pulmicort Respules. These royalties represented an annualised value of approximately $260 million in 2012 under the Core Other Income line in the company’s annual report and accounts. Subject to additional generics entering the market, our guidance for Core Other Income in 2013 is now that it could be significantly below $600 million. The company still expects Core EPS to decline significantly more than revenue in 2013.  

The patents protecting Pulmicort Respules expire in 2018, with paediatric exclusivity extending into 2019.

AstraZeneca filed patent infringement lawsuits against Apotex Inc.; Apotex Corp.; Watson Laboratories and Breath Limited; and Sandoz, Inc., for infringement of US patents directed to methods of use and formulation and form of active ingredient (budesonide) for Pulmicort Respules.

Two of the manufacturers, Apotex and Watson/Breath, had received FDA approval. Neither manufacturer launched its generic product. Apotex was previously enjoined from launching a generic product. Under agreement with AstraZeneca, Teva has a generic Pulmicort Respules product in the market.

At the trial, AstraZeneca contended that the defendants’ generic budesonide inhalation suspension products and their use will infringe the claims of the two AstraZeneca patents, should those defendants market their generic products in the US. The defendants denied that they will infringe and asserted that each patent is invalid under the US patent laws.