US appeals court reverses paroxetine order in favor of Mylan

US generic drugmaker Mylan (Nasdaq: MYL) today (July 23) announced that the US Third Circuit Court of Appeals has reversed a summary judgment ruling dismissing Mylan's claim for breach of contract against UK pharma giant GlaxoSmithKline (LSE: GSK) relating to paroxetine hydrochloride extended-release (ER) tablets, an antidepressant marketed by GSK as Paxil and Seroxat.

In May 2012, federal judge in New Jersey has ruled in favor of GSK, giving it permission to sell generic Paxil to Canadian generics firm Apotex. Mylan accused GSK of breaching a licensing agreement that gave it an exclusive right to market and sell generic Paxil. The judge ruled that right only lasted for two years.

The Appeal court ordered that Mylan's contract claim proceed to trial in US District Court for the District of New Jersey. Mylan had filed suit against GSK claiming that GSK's agreement to supply Apotex with paroxetine violated Mylan's settlement and license agreement with GSK.