The U.S. Food and Drug Administration said it approved Teva Pharmaceutical's generic version of AstraZeneca's blockbuster heartburn drug Nexium, the agency's first such approval for the drug.
The approval comes as generic drugmakers scramble to get their versions to the market and AstraZeneca is taken to court over so-called "pay-for-delay" settlements to delay the launch of generics to protect its drug's exclusivity.
Nexium raked in about $1.9 billion in global sales in the first half of 2014, according to AstraZeneca's latest earnings statement.
Nexium, known chemically as esomeprazole, is a proton pump inhibitor used to reduce acid in the stomach to treat gastroesophageal reflux disease (GERD).
Teva has won approval to make 20 and 40 milligram capsules of the drug for this indication, the FDA said on Monday.
Nexium is also cleared to reduce the risk of gastric ulcers associated with use of non-steroidal anti-inflammatory drugs, to fight the stomach infection Helicobacter pylori, and for use in other conditions where the stomach makes too much acid.
Last month a U.S. federal court ruled it was not anticompetitive for AstraZeneca and India's Ranbaxy Laboratories Ltd to agree to delay the launch of a Nexium generic.
The plaintiffs claim the settlement gave Ranbaxy nearly $1 billion to delay the launch of its generic.
The suit originally also targeted Teva and another Indian generic drugmaker Dr. Reddy's Laboratories, which reached deals with AstraZeneca. Both settled with the plaintiffs.
In November, a U.S. court had denied Ranbaxy's request to prevent U.S-based Endo International and Dr. Reddy's from making generics after the FDA gave the duo approvals to launch their own copies.
Ranbaxy had planned to launch generic Nexium last year, but the FDA revoked its approval citing problems with the company's manufacturing process.
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