Pfizer, the US pharmaceuticals company, said on Monday that it had won a closely watched patent case against Teva Pharmaceutical Industries that would block the generic drugmaker from selling an unbranded version of its blockbuster drug Viagra next year.

The decision came as a surprise to many analysts and will provide a boost to Pfizer, which is facing a sharp drop-off in revenues during the next two years as the patents expire on some of its best-selling drugs. Viagra treats erectile dysfunction and generates about $1bn in annual US revenues for Pfizer.

“It’s an iconic brand and, considering Pfizer needs all the help it can get in the revenue department, it’s a win,” said Les Funtleyder, analyst and fund manager at Miller Tabak.

Pfizer is desperate for revenues because it will lose exclusive rights to sell Lipitor, its top selling cholesterol drug, in November. It has been restructuring its business and cutting its research and development investment to cope with the losses.

A Virginia federal court ruled that Pfizer’s patent gives it exclusive rights to sell Viagra until October 2019. In a 110-page decision, Rebecca Smith, US district judge, wrote: “The court finds that Teva’ s proposed generic equivalent of Viagra would infringe the 2012 patent and finds the 2012 patent is valid and enforceable”.

Although the decision is expected to boost Pfizer, Mr Funtleyder noted that US sales of Viagra represent a relatively small portion of the company’s $68bn in annual revenues. Analysts at JPMorgan said that protecting its rights to sell Viagra would add 3 cents to Pfizer’s 2012 earnings per share and an additional 6 cents for each year until 2019.

The drug compound behind Viagra, which was first intended to treat high blood pressure, was originally set to expire next year. Pfizer had applied for a separate patent, which was granted 10-years ago, for the drug’s use for treating impotence.

Teva and other generic drugmakers have questioned the validity of the second patent in hopes of being able to sell the popular drug sooner.

Teva argued that Pfizer withheld documents when applying for the Viagra patent and that after the initial patent was filed for the drug compound, known as sildenafil, the use of the drug for erectile dysfunction was obvious. If the use was determined to be obvious, then the patent could be deemed invalid.

Peter Ludwig, a patent lawyer at Fish & Richardson, said that the ruling was surprising because Teva was challenging a “method of use” patent. Such patents are more vulnerable because generic companies can argue that once the initial drug compound was created, the threshold for “obviousness” can be hazy.

Pfizer praised the decision, saying in a statement: “Protecting the intellectual property rights of our innovative core is critical, and Friday’s court decision acknowledges Teva’s clear violation of our patent rights”.

Teva did not respond to a request for comment.

Mr Ludwig said that an appeal would be highly likely in such a case but that the decision could fend off similar efforts by other generic drug companies to produce Viagra prior until 2019.

Shares of Pfizer rose 2.69 per cent to $18.34 on Monday. Teva’s shares were up 2.54 per cent to $40.71.

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Viagra, research and serendipity / From Dr Adrian Crisp

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