It wasn't the "important" victory that Pfizer (NYSE:PFE) made it out to be, but yesterday the drug giant did help settle the future for its top drug, Lipitor. Pfizer and the most prolific challenger of its Lipitor patents, Indian generic-drug manufacturer Ranbaxy, settled the vast majority of their litigation.

Pfizer’s cholesterol-lowering Lipitor is set to lose the majority of its patent protection from generic competition in the next decade. This fact was not much in doubt throughout the world. However, Pfizer has used its lawyers to debate with generic drugmakers like Ranbaxy, Teva (NASDAQ:TEVA), and Apotex on when exactly the Lipitor patents would run out.

Ranbaxy has been the biggest thorn in Pfizer's side, challenging Lipitor's patents throughout the world. Its attempts have been a success in places like Norway, but it has met with mixed results in other places, such as Canada. In exchange for Pfizer dropping the majority of the remaining Lipitor patent litigation throughout the world, Ranbaxy gets to launch a generic version of the drug in the U.S. at the end of November 2011 and in multiple other countries during 2011 or 2012.

What does Pfizer gets out of this deal? Basically, it gets a few more months of U.S. Lipitor sales than it was expecting. As recently as its first-quarter earnings conference call, Pfizer was guiding for a June 2011 start of generic competition from Ranbaxy. By postponing this for five months, Pfizer will get to squeeze out another $4 billion to $5 billion worth of Lipitor sales before the drug comes under generic attack. Pfizer will also save a nickel or two by not having to continue fighting as many Lipitor patent battles.

There are still a few cases of Lipitor patent litigation ongoing with other generic drugmakers that are not a part of this deal. Also, this patent settlement won’t stop the Lipitor sales declines that have begun since a rival compound from Merck (NYSE:MRK) began facing generic competition, indirectly hurting Lipitor sales as well.

Lipitor sales were down 7% in Pfizer’s most recent quarter compared to the first quarter last year, and Pfizer still has to figure out what it will do with the giant hole in its revenue stream that will occur once Ranbaxy and the other generic drugmakers enter the market. But now it appears that Pfizer has a few extra months to figure out what to do with its LAL -- life after Lipitor.

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