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Novo Nordisk (NVO - Analyst Report) recently announced that the US Court of Appeals for the Federal Circuit has found the patent on its diabetes drug, Prandin (repaglinide), to be invalid.

Novo Nordisk holds a patent for the combination of Prandin and metformin for the treatment of type II diabetes. In the US, the patent for Prandin has expired while the patent for PrandiMet will expire in 2018.

The US Court of Appeals for the Federal Circuit partially affirmed the district court’s decision, with a two-to-one ruling, finding the patent to be invalid. This will pave the way for the introduction of generic versions of Prandin. The Court of Appeals, however, unanimously reversed the ruling regarding Novo Nordisk committing inequitable conduct at the time of acquiring the patent.

Novo Nordisk had filed a patent infringement lawsuit against Caraco Pharmaceutical Laboratories, Ltd. in the US District Court for the Eastern District of Michigan, in Jun 2005. The lawsuit was regarding Caraco’s abbreviated new drug application (ANDA) for the generic version of Prandin. In Jan 2011, the district court held this patent invalid and unenforceable. Instantly, Novo Nordisk appealed this decision to the US Court of Appeals for the Federal Circuit.

Apart from Caraco Pharma, Novo Nordisk has filed patent infringement lawsuits against three other companies, namely, Paddock Laboratories, Aurobindo Pharma Ltd. and Novartis’s (NVS - Analyst Report) generic division, Sandoz.

Novo Nordisk still believes in the validity of its patent and will provide an update on it at the time of announcing financial results for the first six months of 2013, on Aug 8.

Combined US sales of the two drugs – Prandin and PrandiMet – were 1.2 billion Danish kroner in 2012.

Novo Nordisk currently carries a Zacks Rank #2 (Buy). Currently, companies like Santarus, Inc. and Jazz Pharmaceuticals plc (JAZZ - Analyst Report) look more attractive with a Zacks Rank #1 (Strong Buy).

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