Drugs giant hit by patent woes

Shares in British drugs giant GlaxoSmithKline have slumped after a US court overturned patents on one of its top-selling drugs.

The company said 2002 growth in earnings per share, projected in the mid-teens, could slow to 10% if rivals use the court decision to launch cheaper copycat drugs later this year.

GSK shares closed down 8.7% lower at 1,471 pence on Friday - their lowest level for more than two years.

On Thursday, a US court ruled that patents on GSK's antibiotic Augmentin were invalid, clearing the way for competitors to produce generic versions of the drug.

Big earner

GSK said it was "disappointed" at the court's decision, adding that it intended to appeal.

The appeal is expected to take up to 18 months to complete.

Augmentin, which notched up global sales of $2bn last year, accounts for about 7% of GSK's total sales.

Three rival drug firms, Novartis affiliate Geneva Pharmaceuticals, Teva Pharmaceuticals, and India-based Ranbaxy Laboratories, are thought likely to market generic versions of Augmentin.

"We are getting ourselves ready but on the other hand we are reviewing our overall position in the light of what we think will be a very strong defence from GSK ," Dr. Brian Tempest, President of Ranbaxy Worldwide, told the BBC's World Business Report.

Generic drugs typically sell for half the price of branded medicines, reflecting lower research and marketing costs.

GSK has in recent months also faced challenges to patents on its best-selling product, the antidepressant Paxil.