Krka's TAD Pharma To Pay 2.8 Mln Euro in Damages for Selling Zalasta Drug in Germany

TAD Pharma halted the sale of Zalasta in December last year after the German Federal Supreme Court ruled that the patent for the olanzapin active pharmaceutical ingredient in Germany is valid, reversing the decision of a lower court.

U.S. giant Eli Lilly holds the patent for olanzapine until 2011.

“TAD Pharma reached out of the court settlement with the patent holder. Based on the settlement, TAD is liable to pay for the damages in the amount of EUR 2,800,000 caused to the patent holder by selling its product Zalasta in Germany,” Krka said in a statement to the Ljubljana Stock Exchange (LJSE).

It added that the payment of damages will not have a negative impact on the Krka Group's 2009 financial results because relevant provisions were formed already in 2008.

Krka bought TAD Pharma in 2007 for 97 million euro in order to further enhance its position in the generic pharmaceutical industry in Western Europe.

Shares in blue chip Krka fell 0.2% to an average price of 73.96 euro on the LJSE on Tuesday.

($=0.6741 euro)