Schering-Plough Settles Lawsuits

Yesterday, Schering-Plough Corp. (SGP) said it has signed an agreement with Orchid Chemicals & Pharmaceuticals Ltd. and Orgenus Pharma Inc., which sought to make generic versions of its allergy drug Clarinex.

This signals the end of all pending litigations that Schering filed against several generic drug manufacturing companies in the US District Court of New Jersey since 2006. These companies wanted to market solid oral doses of the drug, desloratadine, in the U.S. as generic brands before the expiration of certain Schering patents.

Pursuant to the agreement, Orchid received rights to launch a generic version of the Clarinex brand Reditabs in the U.S. on Jan. 1, 2012 and Clarinex brand 5 milligram tablets on July 1 of that year. Schering holds various patents related to Clarinex till 2022.

Schering has previously resolved similar disputes with Caraco Pharmaceutical Laboratories Ltd. (CPD), Dr. Reddy's Laboratories Inc. (RDY - Analyst Report), GeoPharma Inc. (GORX), Mylan Pharmaceuticals Inc. (MYL - Analyst Report), Perrigo Co. (PRGO - Snapshot Report) and Watson Pharmaceuticals Inc. (WPI - Snapshot Report), among others.

Clarinex brands provide relief from seasonal allergic rhinitis, perennial allergic rhinitis and chronic idiopathic urticaria or hives of unknown cause.

Schering is currently gearing up for its proposed $41.1 billion merger with Merck & Co Inc. (MRK - Analyst Report). The deal, which will bring many top-selling products under one umbrella, is expected to close in the fourth quarter. The combined entity will have a more diverse portfolio across important therapeutic areas like cardiovascular, respiratory, oncology, neuroscience, infectious disease, immunology and women’s health. We await more visibility into the merger before recommending Schering’s shares to investors.