A U.S. appeals court on Monday revived Swedish pharmaceutical company Orexo AB's lawsuit accusing a unit of Israel's Teva Pharmaceutical Industries Ltd of infringing a patent for its opioid addiction drug Zubsolv.
Shares of Orexo closed 30.9 percent higher in Stockholm after the decision by the U.S. Federal Circuit Court of Appeals in Washington, D.C., which handles intellectual property cases.
Teva is one of the world's largest makers of generic drugs. Lawyers for its Actavis Elizabeth unit, the defendant in Orexo's lawsuit, did not immediately respond to requests for comment.
Opioids, including prescription painkillers and heroin, played a role in 42,249 U.S. deaths in 2016, according to the U.S. Centers for Disease Control and Prevention.
Health officials and politicians often characterize opioid abuse as a serious public health problem or epidemic.
Orexo sued after the Teva unit applied with the U.S. Food and Drug Administration to market a generic version of Zubsolv, which the Swedish company said was patent-protected until 2032.
While both sides agreed that the product covered by Orexo's patent made it easier to treat opioid abuse, a lower court judge found the patent unenforceable because the ingredients were generally known or easily determined.
But the appeals court said the Teva unit failed to establish by "clear and convincing evidence" that Orexo's patent claims were "obvious" and should therefore be voided.
Circuit Judge Pauline Newman said Orexo's patent provided a "significant improvement" for treating opioid addiction, and that its "novel formulation" allowed patients to reduce dosages and lower dependency.
"Although the need to reduce this abuse was known, recognizing a need does not render the solution obvious," Newman wrote.
The appeals court returned Orexo's case to U.S. District Judge Sue Robinson in Delaware for further proceedings.
Orexo said the decision does not change its 2018 financial guidance.
The case is Orexo AB et al v Actavis Elizabeth LLC, U.S. Federal Circuit Court of Appeals, No. 2017-1333.