A US district court ruled in Forest's and Lundbeck's favour in a patent infringement lawsuit against Teva over antidepressant Lexapro (escitalopram). The court decided that the patent covering the drug's active ingredient was valid, enforceable and infringed by Teva's proposed generic version. Lexapro's patent expires in March 2012.

Commenting on the court's decision, Lazard Capital Markets analyst Meghan Murphy noted that '"the favourable ruling on the Lexapro patent resolves the largest risk to [Forest's] shares," Forbes reports. The analyst added that the ruling will likely "refocus" investors' attention to the drugmaker's pipeline. Meanwhile, Banc of America Securities' David Maris suggested that Forest still has some "fundamental risks," despite the positive court ruling.

Forest, which licensed the US rights for Lexapro from Lundbeck, recorded sales of about $464 million for the drug in the quarter ended March 31. Teva garnered FDA approval in May for a generic version of the antidepressant.

Forest's shares rose as much as 16 percent on the news.

Reference Articles

Forest Laboratories wins Lexapro suit against Teva - (Bloomberg)

Forest Labs stock up on patent victory - (BusinessWeek)

H. Lundbeck: US district court confirms Lexapro patent - (Easybourse)

Forest Labs seen with industry-best balance sheet - (Forbes)

Lundbeck, Forest Labs win US patent infringement case against Ivax/Teva - (Forbes)

Forest Labs soars on Lexapro ruling - (MarketWatch)

H. Lundbeck rises 6% in Copenhagen after Lexapro decision - (Morningstar)

Forest announces federal court upholds Lexapro patent - (SmartMoney)

Forest takes Lexapro round - (TheStreet.com)