Shire Plc (SHP) agreed to a legal settlement preventing Actavis Inc. (ACT:US) from introducing a low-cost copy of Shire’s Intuniv drug for attention-deficit hyperactivity disorder until December 2014.
Actavis will get a license from Shire to sell the copy beginning Dec. 1, 2014, or earlier in certain circumstances, Dublin-based Shire said in a statement today. In return, Actavis will pay a royalty of 25 percent of gross profit for the first 180 days that the generic is on the market, Shire said.
Actavis, based in Parsippany, New Jersey, in October won U.S. approval for a generic version of the pill, which generated revenue of $287.8 million last year for Shire. Shire sued, saying it has valid patents on the drug. As part of their agreement, Actavis conceded that its products infringed two valid Shire patents that expire in 2020 and 2022.
The agreement “removes some near-term forecast risk” for Shire, said Savvas Neophytou, an analyst at Panmure Gordon in London.
Shire, the world’s largest maker of ADHD drugs, fell 0.8 percent to close at 1,997 pence in London. Actavis climbed less than 1 percent to $98.89 at 4 p.m. in New York.
The agreement must be submitted to the U.S. Justice Department and Federal Trade Commission for review.
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