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What: Shares of Momenta Pharmaceuticals (Nasdaq: MNTA ) were stopped dead in their tracks and sent back as much as 22% following an unfavorable ruling in a lawsuit filed against it by Teva Pharmaceuticals (Nasdaq: TEVA ) .
So what: Teva Pharmaceuticals is most well-known for its gigantic generic-drug portfolio, but it also derives about one-third of its revenue from in-house-developed, branded drugs. One of those drugs, Copaxone, is the world's best-selling multiple sclerosis drug. Copaxone is responsible for more than $3 billion in sales each year. Teva had filed a lawsuit against Momenta, Mylan (NYSE: MYL ) , and Novartis (NYSE: NVS ) to keep them from selling a generic version of Copaxone. Today's ruling upheld Teva's patent protection until at least Sept. 1, 2015, and Teva could be in good shape to win its other patent lawsuits.
Now what: This is far from the end of the road for Momenta, but it clearly takes the wind out of shareholders' sails. In December Momenta entered into a collaborative agreement with Baxter International (NYSE: BAX ) to develop biosimilars to replace existing drugs. This should boost sales and drive product diversity. However, with the high-profile Copaxone off the table for at least another three years, Momenta shareholders are going to need to be even more patient.
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