Watson wins nicotine gum lawsuit

Drug Store News, April 24, 2000

A U.S. Court of Appeals has ruled in Watson's favor after SmithKline Beecham appealed the District Court's January decision to allow Watson to ship and sell its Nicotine Polacrilex Gum. The Appeals Court also directed dismissal of the underlying copyright infringement action brought by SmithKline Beecham Consumer Health-care against Watson. Watson's stock rose 10 percent on news of the decision, as did most other generic stocks. The court concluded that Watson can't be liable because "generics must use the same labeling as [ldots] the pioneer drug."

According to Warburg Dillon Read analysts, generic Nicorette gum could be a $50 million product. "In a nearly $300 million brand market, we would not be surprised to see $50 million come to Watson. We see few if any other competitors in this quirky little segment."