TEVA, CEPHALON REACH AGREEMENT TO END PATENT DISPUTE

Teva Pharmaceutical and Cephalon have agreed to settle patent infringement suits in the U.S. and the UK over Cephalon's narcolepsy drug Provigil. Under the agreement, Teva and biopharmaceutical firm Cephalon will file dismissals with prejudice with the U.S. District Court for the District of New Jersey as well as the Chancery Division of the UK's High Court of Justice. Cephalon sued Teva and three other generic firms in March 2003 after they filed to market generic Provigil.

The settlement could remove one near-term generic threat to Provigil (modafinil) and its extended-release follow-on, set to hit the market in early 2006, as well as a potential threat to Cephalon's forthcoming modafinil-based drug intended as a treatment for pediatric attention-deficit/hyperactivity disorder (ADHD) in children ages 6 to 17. With its mild side effects, the ADHD drug now has even more commercial potential since Eli Lilly in September warned that its ADHD drug Strattera may increase the risk of suicidal thoughts in adolescents and children.

"The opportunity presented itself and we pursued it," Cephalon spokesman Robert Grupp told FDAnews. "Investors don't like uncertainty. It made sense to settle this and remove one element of uncertainty."

However, three other generic firms — Mylan Laboratories, Ranbaxy Laboratories and Barr Laboratories — are still poised to market generic Provigil when Cephalon's orphan drug status expires, which will happen in late December or next June, depending on whether Cephalon receives a pediatric patent extension.

Under the agreement, Teva will be able to start selling generic Provigil for the U.S. market in October 2011 and in Europe by October 2012 — three years before Provigil's composition patents for those areas expire. However, Teva could launch generic Provigil earlier if another generic firm launches a version of the drug.

Provigil was Cephalon's top-selling drug in 2004, generating sales of $439.7 million, and the FDA is poised to approve Nuvigil (armodafinil), an extended-release version of the drug, in January 2006.

Provigil has also been shown to improve wakefulness, performance and attention level in patients with shift work sleep disorder.

Meanwhile, Cephalon has also received an approvable letter from the FDA to market modafinil in a new formulation and dosage for the treatment of pediatric ADHD. Cephalon will market Sparlon with the help of Johnson & Johnson's McNeil Consumer & Specialty Pharmaceuticals unit, which signed a co-promotion agreement with Cephalon in August.

Under the settlement, Teva will pay Cephalon a royalty for the non-exclusive right to market and sell a generic version of Provigil, and Teva will manufacture modafinil for Cephalon. Cephalon meanwhile will pay Teva a royalty on Provigil sales. Financial terms of the deal were not disclosed.

Grupp said Cephalon still plans to pursue litigation against Mylan, Ranbaxy and Barr. No trial date has been set yet for those cases, which have been consolidated in the New Jersey district court, Grupp said.