Lilly paying $4 million to settle Prozac case

The lawsuit brought by Barr Laboratories, and co-defendants Apotex andGeneva, against Eli Lilly concerning patent disputes over the latter's antidepressant Prozac (fluoxetine; Marketletter November 30, 1998) has ended with Lilly agreeing to a settlement of $4 million in a case that has been in preparation for almost two years.

In a pretrial ruling earlier this month, a US District Judge threw out Barr's claims against the double-patenting of Prozac and allegations that Lilly did not supply the US Patent Office with the "best mode" for the production of Prozac. The latest judgement means that Barr has agreed to permanently drop two other charges, those of inequitable conduct and anticipation against Lilly.

Barr president Bruce Downey told Reuters that the company agreed to settle only to save time in getting the previous two charges to the appeals court, though analysts believe that Lilly has scored a famous victory. Alex Zisson of Hambrecht & Quist said that as Prozac is still vital to Lilly's short-term growth, this is one storm cloud that has blown off the horizon, while David Saks at Gruntal said that the company has now won more time to develop a "super new Prozac" in conjunction with Sepracor. He described the $4 million settlement as "chump change" for Lilly.