Nasdaq–listed, Dublin-based biopharmaceuticals firm Jazz Pharmaceuticals PLC (NASDAQ:JAZZ) saw its shares jump by over 6% in pre-market trading today after it agreed a settlement with London-listed Hikma Pharmaceuticals PLC (LON:HIK) which resolves a patent litigation with regards to Jazz's narcolepsy treatment, Xyrem.
Under the settlement, Jazz will grant Hikma and its wholly-owned subsidiary West-Ward Pharmaceuticals Corp the right to sell an authorised generic version of Xyrem in the US from the beginning of January 2023.
Hikma will pay a royalty on net sales of the excessive sleepiness treatment, but will initially retail a "meaningful percentage" of net sales, the UK firm said in a statement.
The FTSE 100-listed group will also pay for the supply of the generic drug, and reimburse Jazz with a portion of the service costs.
Sales of Xyrem were reported at around US$D1.11bn in 2016, according to Jazz's annual report.
The initial term of the agreement is six months, and Hikma will have the option to extend this term for a total of five years.
Jazz has also agreed to grant Hikma a licence to market generic sodium oxybate, the active ingredient in Xyrem at the end of the term.
In pre-market trading in New York, Jazz shares were 6.1% higher at US$149.20, while in London, Hikma shares were 16p lower at 1,916p.