Actavis said today it is planning a 2016 launch for its generic versions of AstraZeneca’s cholesterol treatment rosuvastatin calcium (Crestor®) 5, 10, 20, and 40 mg tablets, after settling outstanding patent litigation with the pharma giant.

Actavis, the world’s third-largest generics prescription drug manufacturer, said it will launch generic Crestor 67 days before the July 8, 2016, expiration of the drug’s pediatric exclusivity. The drug’s substance patent expires six months earlier.

In return, AZ will receive a “fee” from Actavis of 39% of net sales until the end of the pediatric exclusivity period. AZ is scrambling to make up for sales revenues it is set to lose due to the “patent cliff” expiration of several brand-name drugs through 2014—a task complicated by several late-stage clinical setbacks involving drug candidates the company had expected would reach the market.

Crestor racked up $6.253 billion in sales for AZ last year, down 4% from $6.622 billion in 2011. While Crestor is still expected to generate some $6 billion this year, that will be complicated somewhat by the drug’s loss of patent protection in Australia.

As for generic Crestor, its launch date may be earlier and the fee eliminated under certain circumstances, Actavis said. The launch date will ultimately hinge on Actavis receiving final approval from FDA on its Abbreviated New Drug Application (ANDA) for generic Crestor. Actavis received tentative ANDA approval from FDA on June 6, 2011.

Also standing to gain from sales of generic Crestor will be Actavis’ partner, Hungarian-based Egis Pharmaceuticals. Egis and Actavis’ subsidiary Watson Laboratories agreed as part of the settlement that the Crestor substance patent is valid, enforceable, and would be infringed by the generic rosuvastatin zinc product and rosuvastatin calcium product. Watson also agreed not to further appeal an earlier decision by the U.S. Court of Appeals for the Federal Circuit upholding the validity and enforceability of AZ’s Crestor patents.

Under the settlement, Actavis can also launch its rosuvastatin zinc alternate salt product beginning May 2, 2016 or earlier under certain circumstances. “At this time, the company has made no decision regarding a potential launch,” Actavis said in a statement.

The salt product is not generically substitutable for Crestor and would require Actavis to convert patients from Crestor. Actavis’ rosuvastatin zinc alternate salt product received tentative approval from the FDA in August 2011.

“This agreement ensures that consumers will benefit from an earlier launch of a rosuvastatin calcium product and eliminates ongoing litigation and uncertainty of marketplace acceptance of a non-generically substitutable product if Actavis had proceeded to launch the alternate product,” Paul Bisaro, Actavis’ president and CEO, said in the statement.

Actavis said other details of the settlement are confidential.

“Clearly it removes uncertainty for Astra though we don’t see how much they paid to obtain this settlement, so it is difficult to assess the economic value,” Fabian Wenner, an analyst with Kepler Capital Markets who rates the share hold, told Bloomberg News. “Strategically, this helps Astra to focus on restructuring and set the organization at ease.”

Even as they buried the hatchet on Crestor and the rosuvastatin zinc alternate, however, Actavis and AZ remain at odds on another generic drug. AZ touched off another legal wrangle on March 19 when it filed suit against Actavis in a New Jersey federal court. AZ alleged that Actavis infringed on five of its patents in making a generic version of the active ingredient in the heartburn drug Nexium IP.

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