Lilly was sued in 2002 by Ariad Pharmaceuticals (ARIA:Nasdaq - commentary - research - Cramer's Take) of Cambridge, Mass. The small biotech company said Lilly infringed on an Ariad patent when Lilly developed Evista for osteoporosis and Xigris for septic shock.
Evista is Lilly's fourth-biggest drug with sales of $1.04 billion last year. Xigris posted sales of $214.6 million.
Ariad was joined in the suit by Harvard College, the Massachusetts Institute of Technology and the Whitehead Institute of Biomedical Technology, a nonprofit research institution. These three Boston-area educational institutions own the patent and license it to Ariad.
Lilly didn't care for the decision. "As we proved in court, Lilly discovered these drugs and disclosed their medicinal properties years before the patentees' scientists made their discovery," says Robert A. Armitage, senior vice president and general counsel for Lilly.
More:
http://www.thestreet.com/_tscrss/stocks/pharmaceuticals/10283770.htmlAnd from Forbes: Ariad's Legal Win A 'Long-Term Positive'
Bear Stearns maintained an "outperform" rating on Ariad Pharmaceuticals after a federal jury awarded the tiny biotech and co-plaintiffs $65 million in a patent infringement case against big pharma firm Eli Lilly.
The Cambridge, Mass.-based Ariad (nasdaq: ARIA - news - people ) claimed Lilly violated patents it held related to a chemical pathway known as NF-kappa B, a ruling that could have long-term implications for big pharma. Lilly shares were flat on the news but shares of Ariad surged in Thursday's trading session, up 25% on the news.
In addition to the multi-million dollar payment for royalties owed on sales of osteoporosis drug Evista and septic shock drug Xigiris, Lilly will be required to pay future royalties through 2019.
Lilly immediately announced plans to appeal the ruling. "We anticipate that Ariad may ultimately receive over 75% of the royalties, with the remaining going to the co-plaintiffs if the verdict is upheld," wrote Bear Stearns analyst Akhtar Samad, in a report sent to clients.
http://www.forbes.com/markets/2006/05/04/ariad-eli-lilly-0504markets18.html?partner=rss