Lilly's US patent on blockbuster antipsychotic drug Zyprexa (olanzapine) has been upheld, after a Supreme Court ruled against its generic challengers.

Zyprexa's patent will now stay in effect until 2011, following the US judge's ruling in Lilly's favour on all counts.

Three generic companies, Israel's Teva, IVAX of the US, and India's Dr Reddy Laboratories, had challenged Lilly's patent, accusing the US drugs company of engaging in "inequitable conduct" in order to get its main patent.

But the judge, in a long-awaited announcement, found in Lilly's favour, removing a cloud over the company's biggest selling drug.

IVAX said it would appeal to the US Court of Appeals over the decision.

Zyprexa, a treatment for schizophrenia and bipolar disorder, generated sales of over $4 billion last year but concerns over its weight gain and diabetes side-effects have hit the drug's growth.

Increased competition from AstraZeneca's Seroquel and Bristol-Myers Squibb's Abilify had also dented its growth, though the drug still recorded US sales of $2.9 billion in 2004.

Lilly will hope the patent's extension will give it time to establish sales of its two new psychiatry drugs, Strattera and Cymbalta.

Commenting on the court's decision, Sidney Taurel, Lilly chief executive, said: "For Lilly, it means our shareholders and our employees can focus on the fundamentals of the company. The protection of intellectual property is important not only for the industry, but for the patients and physicians."

Ivax filed a challenge in 2001 alleging that Lilly engaged in "inequitable conduct" in order to obtain its main patent for Zyprexa.

The Miami-based company said that Lilly did not reveal data from a study in dogs in order to bolster its case that the new compound was different to another compound Lilly had already patented.

Analysts Datamonitor predict the antipsychotic market will face a shake-up in 2008, when Johnson & Johnson's Risperdal patent expires. But, unlike Lilly, Johnson & Johnson will be optimistic of retaining market share, after investing in follow-up antipsychotic Paliperidone.

pharmafocus@wiley.co.uk