Teva Pharmaceutical Industries disclosed this week that it may take as much as $2 billion in charges related to its premature launch of a generic version of Pfizer’s gastroesophageal reflux disease drug Protonix five years ago.

In its 2012 “Form 20-F” annual report required of overseas-based companies, filed Tuesday with the U.S. Securities and Exchange Commission, Teva projected it could lose “up to $1.4 billion in excess of” the $670 million it originally set aside last year for covering potential damages from the quick launch. The addition appears to be a response to Pfizer seeking more than $2 billion in lost profits and damages from Teva, in the damages portion of a U.S. District Court for the District of New Jersey lawsuit set to come to trial June 3.

The case stretches back almost a decade to 2004, when Nycomed (since acquired by Takeda) and Wyeth (since acquired by Pfizer) sued Teva and Indian-owned Sun Pharmaceutical for patent infringement related to both companies’ launches of generic Protonix (pantoprazole). The generic drugs entered the market in December 2007, just over three years before expiration of the drug’s key U.S. patent in January 2011. Up to then, Teva generated about $1.1 billion in sales of generic pantoprazole sodium tablets in 20 mg and 40 mg doses.

Wyeth saw sales of its branded Protonix plunge from $1.9 billion in 2007 to about $395 million in 2008 alone. Six months later, Wyeth reported the $179 million in Protonix sales made during the first half of 2009 was less than the $284 million racked up by generic versions of the drug. Later that year, Wyeth successor Pfizer lumped the sales of all Wyeth drugs into a single figure, so numbers from full-year 2009 on are unavailable.

While Teva proceeded with the launch on the assumption that the patent was invalid—arguing that it was a near duplicate of an older patent—a district court jury disagreed in an April 2010 verdict. Three months later, the District Court denied Teva’s motion to overturn that verdict. At the time, Souvik Chatterjee of SMC Global Securities predicted in a note to clients quoted by Bloomberg that: “the parties will reach an out-of-court settlement between $400 million to $600 million.”

“Teva intends to appeal the jury verdict and the District Court’s decision, but cannot do so until after completion of the trial of the damages phase of the case, which is scheduled to begin June 3,” the company said in its annual report.

In a separate lawsuit, Pfizer is seeking about $960 million in damages from Sun Pharma for its early market launch of generic Protonix.

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