GlaxoSmithKline and Novartis reach out-of-court settlement over Augmentin

GlaxoSmithKline and Novartis came to terms in an out-of-court settlement for their dispute over Novartis' generic Augmentin, which the Swiss drugmaker sells as AmoxC, news sources report.

Under the terms of the settlement, Glaxo will receive "single-digit percentage royalties" on U.S. sales of AmoxC from July 2002 through June 2006. Analysts say the deal will only minimally affect the two drugmakers financially. The settlement will not affect a separate patent dispute between Glaxo and Geneva Pharmaceuticals, Novartis' generic unit, nor will it affect other cases ongoing that Glaxo has filed against Teva Pharmaceutical Industries and Ranbaxy Laboratories.

Glaxo's flagship drugs have been increasingly hit by generic competition and investors and industry-watchers view its developmental pipeline as dwindling, a news source reports. Augmentin was once the company's second-biggest seller at $2 billion a year before its patent expiry May 2002. Other drugs facing competition are Paxil and Wellbutrin. Generic challenges to Valtrex and Imitrex were recently announced. According to a news source, Glaxo is buying up nearly twice as many drug licenses as its rivals in an attempt to offset flagging sales.

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