Allergan Wins Court Battle Over Its Patent

IRVINE — Allergan Inc., the eye and skin care concern, said Tuesday that a federal court has upheld its patent for a key ingredient used in its two-step contact lens cleaning product and announced plans to buy back 1.2 million of its shares.

A suit challenging Allergan’s patent for Ultrazyme--an enzyme used with hydrogen peroxide to clean and disinfect contact lenses--was brought by Alcon Laboratories of Ft. Worth, Tex., which wanted to begin marketing a similar product.

The decision by the U.S. District Court for the Northern District of Texas will help to protect future sales of Ultrazyme, which is Allergan’s largest domestic contact lens product, from patent intrusion, said Allergan spokesman B. Norris Battin.

But Battin acknowledged that the two-step cleaning product already is losing market share to competing one-step contact lens cleansers sold by other manufacturers. Irvine-based Allergan’s lag in developing a one-step lens cleanser and an industrywide slowdown in sales of contact lenses were depressing the price of the company’s stock even before the most recent downturn of the stock market.

As a result, the Irvine-based manufacturer also said it had decided to take advantage of a steep dip in the price of its stock to repurchase 1.2 million shares that will be used in employee stock benefit programs. The company has 67.7 million shares outstanding.

Allergan’s stock closed at $15.50, up 25 cents, in trading on the New York Stock Exchange on Tuesday.

Battin said one of the company’s objectives in its stock repurchase will be to buy all common stock held by shareholders owning fewer than 100 shares.

Allergan’s stock sold at a high of $25.50 shortly after Allergan was spun off as a separate company from SmithKline Beckman in July, 1989, when that Philadelphia-based pharmaceutical giant merged with London-based Beecham to form SmithKline Beecham PLC.