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GSK and Novartis settle over Augmentin

Published on 29/10/03 at 04:42pm

GlaxoSmithKline has reached an agreement with Novartis in its court action over stolen trade secrets for its antibiotic Augmentin.

Novartis will pay GSK "single-digit percentage royalties" on sales of AmoxC, its generic version of Augmentin, between July 2002 and June 2006.

The dispute centred on whether GSK was entitled to claim patent protection for the bacteria strain on which Augmentin is based and the company had claimed Novartis was using a stolen strain of its bacteria to make its version of the drug.

GSK also has outstanding court actions against generic manufacturers Teva and Ranbaxy over their versions of its antibiotic.

Before its US patent protection expired Augmentin was a $2 billion a year product and GSK's second-biggest selling product.

In the first quarter of this year sales of the product fell by 42%, less than was expected, as the company introduced two new formulations to help manage the impact of patent expiry.

Patent expiries on some of its top products continue to cause investors concern after generic challenges emerged for GSK's two other biggest sellers, antidepressants Paxil and Wellbutrin.

GSK has had to accelerate its in-licensing activities as its looks to plug gaps in its product portfolio.

A recent study revealed that the company was buying nearly twice as many products as its rivals, just three years after touting its R&D excellence when it was formed in the merger of Glaxo Wellcome and SmithKline Beecham.

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