Bausch won a U.S. appeal to block Alvogen, a generic anti-diarrheal drug. By Reuters

blake briton

(Reuters) – A U.S. appeals court on Thursday affirmed Bausch Health’s decision to ban rival drugmaker Alvogen from marketing a generic version of Bausch’s diarrhea drug Zyfaxan until 2029.

A federal court in Delaware ruled that a generic from Alvogen subsidiary Norwich Pharmaceuticals would infringe on patents owned by Bausch’s Salix Pharmaceuticals. This blocks the U.S. Food and Drug Administration (FDA) from approving generics until Xifaxan’s last U.S. patent expires in October 2029.

Representatives for Bausch and Alvogen did not immediately respond to requests for comment on the decision.

Bausch said the lawsuit could affect plans to spin off its ophthalmology business Bausch + Lomb. Analysts at Jefferies said Thursday the decision removes a “key barrier” to a spinoff.

Bausch separately agreed to allow generic versions of Xifaxan from Teva Pharmaceuticals and Sun Pharmaceuticals. sandos (SIX:) will begin in 2028 after resolving related patent disputes.

Zyfaxan is approved to treat traveler’s diarrhea and irritable bowel syndrome (IBS) and may be used to prevent hepatic encephalopathy (HE), a liver-related brain disorder.

Salix sued Norwich in 2020 for patent infringement over its proposed generic. A federal judge in Delaware ruled in 2022 that generics infringe on three Salix patents related to HE treatment and will declare other Salix patents invalid.

Norwich asked the U.S. Court of Appeals for the Federal Circuit to overturn the district court’s decision to block the generic on the basis of infringement, while Salix appealed its decision to invalidate other patents.

The FDA tentatively approved Norwich’s generic last year but declined to give final approval because of a Delaware court order.

Norwich also appealed the loss in a separate lawsuit in federal court in Washington, D.C., seeking to force the FDA to fully approve the drug.