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AstraZeneca Climbs After US Seroquel Patent Victory, as Mining Groups Lift FTSE 100 Higher

From Guardian Web (March 30, 2012)

With analysts tipping AstraZeneca to seek acquisitions to boost its drugs pipeline and it growth prospects, the company has won a US victory in the increasingly complex patent situation surrounding its Seroquel treatment.

A US court has ruled Astra's patent for the extended release version anti-psychotic drug is valid, meaning companies trying to sell cheaper generic versions had infringed its rights. US group Mylan said earlier this week it had begun selling versions of regular Seroquel.

The judgment relates to the US only, and follows news last week that a UK court had ruled against Astra. Prior to that, a Netherlands court backed the patent's validity. Dr Mike Mitchell at Seymour Pierce said:

The ongoing saga surrounding AstraZeneca's Seroquel franchise took a step forward overnight, as the company announced that the US District Court for New Jersey found the formulation patent surrounding Seroquel XR to be valid. The result is that four generic manufacturers have been found to infringe Astra's US patent on Seroquel XR, which will at least alleviate the near-term pressure on this particular product (key patent expiry 2017) which generated $1.4bn of Seroquel's global 2011 $5.83bn sales. Nevertheless, the exposure on [regular] Seroquel remains a key near-term issue and, in light of our broader view with respect to issues such as the thin pipeline and position on generic Lipitor/Crestor volume/pricing, we stay with reduce.

Even so the US court news has given a lift to Astra's shares, up 16p to 2794.5p. But analysts believe the company needs to act to prop up its weak pipeline of drug prospects. Liberum Capital tipped US group Forest Laboratories as a possible target, while some believe Astra may also make a move from Amylin Pharmaceuticals, which has already rejected an offer from Bristol-Myers Squibb.

Posted: March 2012