(Reuters)—A U.S. judge invalidated patents on Allergan Plc’.s dry eye medicine Restasis on the grounds that the patents cover obvious ideas, a decision that drove the pharmaceutical company’s shares down more than 6%.
Judge William Bryson issued the ruling in federal court in Marshall, Texas, in a longstanding dispute between Allergan and generic drugmakers led by Mylan NV and Teva Pharmaceutical Industries Ltd.
Allergan said it was disappointed and plans an appeal of the ruling, which would enable the generic drug companies to sell their own versions of Restasis.
The drug generated around $1.5 billion in sales for Allergan last year and accounted for more than 10% of the company’s revenue.
The patents at issue were the same ones Allergan transferred to a Native American tribe in an effort to protect them from administrative review. The company has said it will not invoke the tribe’s sovereign immunity in federal court.
U.S. lawmakers from both political parties have criticized the drugmaker’s maneuver. Democratic U.S. Sen. Claire McCaskill (D-Mo.) drafted a bill in response to the move and a U.S. House of Representatives committee is investigating the deal.
Judge Bryson said Allergan’s deal with the tribe was a “ploy” and he had “serious concerns” about its legitimacy.
On the news, Allergan’s stock price dropped as much as 6.5% to a session low of $192.22.