Bloomberg News

Glaxo to Pay $35 Million to End Wellbutrin XL Suit

February 12, 2007

GlaxoSmithKline Plc (GSK), the world's second-biggest drugmaker, agreed to pay Watson Pharmaceuticals Inc. (WPI:US) $35 million plus royalties to resolve a patent-infringement lawsuit over the antidepressant Wellbutrin XL.

Andrx Corp., bought by Watson last year, sued Glaxo in December 2005 in federal court in Miami, claiming that the 150-milligram form of Wellbutrin XL infringed an Andrx patent. As part of the settlement, Glaxo will get a license to the patent and will pay royalties, Watson spokeswoman Patty Eisenhaur said. Watson hasn't disclosed the amount of the payments or how long they will last, Eisenhaur said.

Wellbutrin XL, sold in 150- and 300-milligram doses, generated 798 million pounds ($1.55 billion) in sales last year for London-based Glaxo. The drug lost patent protection in December, and generic versions entered the market. Glaxo sells the drug with partner Biovail Corp., a Canadian company that wasn't named in the Andrx lawsuit.

The settlement ``helps the company avoid the expense and uncertainty of litigation,'' Glaxo spokeswoman Mary Anne Rhyne said.

Watson, a Corona, California, maker of generic drugs, bought Davie, Florida-based Andrx for $1.9 billion in November. The patent was issued in June 2005.

Watson shares rose 18 cents to close at $28.35 in New York Stock Exchange composite trading. Glaxo's American depositary receipts, each representing two ordinary shares, rose 36 cents to $56.74. New York-based Pfizer Inc. is the world's largest drugmaker.

The case is Andrx Pharmaceuticals LLC v. GlaxoSmithKline Plc, 05cv23264, U.S. District Court for the Southern District of Florida (Miami).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net.


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