SHIRE Pharmaceuticals yesterday agreed a crucial deal that will preserve sales of the company’s top-selling drug until it launches a next-generation alternative.

The drug developer, based in Basingstoke, is trying to uphold the patents to Adderall XR, its blockbuster medicine for hyperactive children, against a barrage of challenges from copycat manufacturers looking to launch a cheaper generic alternative.

Shares in the company jumped 23p to 835p — a four-year high — as a US judge agreed to delay court proceedings between Shire and Impax Laboratories, one of its potential competitors, pending a possible settlement.

Later, after the market closed, the company was able to announce that all litigation with Impax had been settled. The agreement will allow Impax to sell generic versions of Adderall “no later than January 1, 2010” while paying Shire royalties.

The move will give Shire’s scientists time to finalise the launch of a new-generation hyperactivity treatment so far known only by the codename NRP104. The company hopes that the new treatment, currently before regulators for approval, will more than make up for any eventual loss of revenues from Adderall.

Companies typically expect sales to slump by as much as 80 per cent when a generic version of a drug hits pharmacy shelves. Analysts had fretted over the impact of a copycat alternative to Adderall — the treatment is expected to generate sales of about £700 million this financial year and will make up as much as half of total profits.

Shire also faces challenges from three other generic makers. The company is holding settlement negotiations with Barr Laboratories, which is closest to seeking approval from regulators for its version of Adderall but further behind Impax in legal challenges to ownership rights to the drug.

A further two generic companies, Teva Pharmaceuticals and Colony, are planning to make their own versions of Adderall. However, Shire has stated that it does not plan to take legal action against either party.

Shire said that, in the event of a generic version being launched, Impax may be allowed to bring forward the launch of its own version as the British company’s “authorised generic”.

This week Matt Emmens, Shire’s chief executive, buoyed the group’s shares when he told American investors that talks were progressing well and that he was confident of reaching a deal.

Analysts gave warning that the devil of any agreements could be in the detail, arguing that the pricing of NRP104 will be crucial if the treatment is to compete against cheap versions of Adderall.

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