Impax Laboratories has acknowledged the validity and enforceability of a key patent held by Purdue covering its pain treatment OxyContin, according to a settlement agreement reached by both companies.

Under terms of the agreement, Impax has permission, via a product license from Purdue, to continue selling limited quantities of its generic version through June 14. The agreement also authorizes the generic firm to resume marketing its drug at an undisclosed date in the future.

In addition, Purdue releases the generic firm from certain legal liabilities related to previous sales of generic versions of its painkilling drug prior to patent expiration. "Purdue agrees it will not pursue damages against Impax for past infringement," the company said.

The agreement settles a patent infringement lawsuit filed by Purdue Pharma to block sales of generic OxyContin.

Impax produces its version of the drug in controlled-release tablets that contain oxycodone hydrochloride, the active ingredient in Purdue's OxyContin.

The agreement amends terms of an exclusive drug distribution agreement Impax made with Dava Pharmaceuticals after it won final FDA approval to market generic oxycodone hydrochloride tablets in 2005. "The settlement removes patent litigation risks to Impax and Dava [its distributor] and the amendment with DAVA better reflects the changes in the marketplace," Impax President and CEO Larry Hsu said.