GlaxoSmithKline shares down due to unexpected generic ruling

GlaxoSmithKline (GSK) shares fell yesterday after an American court unexpectedly ruled that an application for a generic version of Wellbutrin XL, the antidepressant, did not infringe upon the patents of the UK’s largest pharmaceutical company or its US partner, Biovail.

Biovail said it intended to appeal the decision, citing a number of “material factual disputes”.

GSK has said the decision is unlikely to affect its financial forecasts for this year, although some analysts have said the decision may have wider implications.

Reuters quotes a research note from Morgan Stanley analysts, saying: “This unexpected negative news on Wellbutrin XL is likely to increase awareness of potential downside risk to other mature drugs.”

A GSK spokesman told the same agency: “We are awaiting the parties’ official statements on the case. GSK’s earnings guidance for 2006 of earnings per share growth of around 12 percent remains unchanged.”

A Biovail statement read: “Biovail believes this reversal of position by the US District Court is contrary to the record and believes, as the court tentatively concluded, that there are material factual disputes, which require a trial of this matter on the infringement issue.”

Wellbutrin sales rose last quarter by a total of 40 per cent, which was recently approved for use in patients with seasonal affected disorder. The revenue from the drug was 237 million pounds, much of which GSK could stand to lose if a generic version of Wellbutrin XL appears on the UK market.

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