Validity of Lilly patent on Zyprexa is upheld

Eli Lilly & Co. won a U.S. appeals court ruling upholding its patent on Zyprexa, the world’s top-selling schizophrenia drug.

The U.S. Court of Appeals for the Federal Circuit on Tuesday affirmed a lower court decision that the patent was valid. The Ivax unit of Teva Pharmaceutical Industries Ltd. and Dr. Reddy’s Laboratories Ltd. had claimed that a U.S. judge was mistaken in ruling that the drug was protected until Lilly’s patent expires in 2011.

In addition, “Lilly did not fail to disclose information” to the patent office, as its rivals suggested, the judges said.

Indianapolis-based Lilly is also defending its marketing of Zyprexa in lawsuits by attorneys general of Mississippi, Louisiana, West Virginia and Alaska alleging that the company promoted it for unapproved uses and hid the risks of weight gain and diabetes. In 2005, U.S. sales of Zyprexa dropped 16% and fell behind AstraZeneca’s Seroquel as America’s best-selling antipsychotic, according to data compiled by IMS Health Inc.

Worldwide sales of Zyprexa dropped 4.9% to $4.2 billion last year and accounted for about 29% of Lilly’s revenue. The drug has been Lilly’s biggest seller since generic competition emerged to its antidepressant Prozac in 2001.

Shares of Lilly rose 43 cents Tuesday to $51.78. The stock has lost 8.5% this year.

“We were confident all along that the intellectual property surrounding Zyprexa was both valid and enforceable,” said Phil Belt, Lilly’s director of corporate communication, in a phone interview. “We’re pleased the court of appeals upheld the decision.”

Ivax and India’s Dr. Reddy’s, both of which have said their proposed versions of Zyprexa would infringe Lilly’s patent, claimed that the patent should not have been issued by the U.S. Patent and Trademark Office in 1993. They asked the Washington-based court in April to rule the patent invalid.