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AstraZeneca Appeals Prilosec Ruling

November 5, 2002

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NEW YORK (AP) _ AstraZeneca PLC said Tuesday it will appeal a court ruling that paved the way for other companies to launch a generic version of its blockbuster ulcer medication Prilosec before the end of the year.

The pharmaceutical company said a detailed review of last month’s court’s decision, ``revealed that the court made reversible errors in determining key facts and applying the law.″

AstraZeneca spokeswoman Rachel Bloom Baglin wouldn’t elaborate on the errors or say when appeal would be filed.

On Oct. 11, U.S. District Judge Barbara Jones ruled that Kremers Urban Development Co., known as KUDCo, didn’t infringe on Prilosec’s patent but that three other generic drug companies did. KUDCo’s ability to launch its version was in question because it didn’t have Food and Drug Administration approval for its drug and two other firms had six-month market exclusivity for their versions.

But Andrx Corp. and GenPharm Inc., which lost the patent infringement suit, said they would relinquish their exclusivity to KUDCo for a share of the profits. The FDA approved KUDCo’s version of the drug last week.

KUDCo reiterated Tuesday that it would launch its product before the end of the year, regardless of AstraZeneca’s decision to appeal.

``We were not surprised at all by AstraZeneca’s decision,″ said KUDCo spokeswoman Laurie Nelsen. ``We are confident in our position.″

Analysts said it was a gutsy move because KUDCo could owe AstraZeneca significant sums of money if it lost on appeal. One analyst said KUDCo was likely to be insured against negative judgment.

Nelsen said she didn’t know if KUDCo’s insurance would cover a negative judgment and said it wasn’t a subject the company would discuss.

AstraZeneca shares rose up 62 cents, or nearly 2 percent, to close at $35.22 each on the New York Stock Exchange. Andrx shares fell 95 cents, or 5 percent, to $16.99 each on the Nasdaq Stock Market.

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