Schizophrenia :: Eli Lilly comments on recent court rulings regarding Zyprexa patents

Eli Lilly and Company (NYSE: LLY) responded to two recent court rulings by the Canadian Federal Court and the German Patent Court that could result in the entry of generic olanzapine (Zyprexa) into the Canadian and German markets.

Lilly believes these decisions are deeply flawed and are inconsistent with both the evidence presented at trial and with the legal principles that the company believes apply. The company plans to appeal both decisions. While the courts’ decisions may result in generic olanzapine being marketed in Canada and Germany, in both cases, should Lilly prevail on appeal, it would be entitled to damages.

Commenting on the rulings, Robert A. Armitage, Lilly’s senior vice president and general counsel said, “These decisions, if not overturned, undermine intellectual property protection in Canada and Germany and erode the incentives of pharmaceutical and biotech companies to make the high-risk investments necessary to discover and develop breakthrough medicines. We believe we must take a strong stand on behalf of innovators and intend to take every possible step to protect what we continue to believe are intellectual property rights regarding the validity of the Zyprexa patents in Canada and Germany through 2011.” Armitage noted that these rulings have no bearing on Lilly’s Zyprexa patents in other international markets, nor on the U.S. patent, which had been upheld on appeal in December, 2006 and will remain in effect until 2011.

The court decisions are not expected to have a material impact on Lilly’s financial condition, and the company’s current 2007 earnings per share guidance will not be changed as a result. The company still expects adjusted earnings for the second quarter of 2007 to be between $.80 and $.82 per share, and expects adjusted earnings for the full year 2007 to be between $3.30 and $3.40 per share. On a reported basis, the company still expects earnings for the second quarter of 2007 to be between $.50 and $.52 per share, and expects earnings for the full year 2007 to be between $2.63 and $2.73 per share.


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