AHKSY Asahi Kaisai Corp (PK)

Swiss biotech Actelion Ltd (ATLN.VX) Monday said it will continue its court room fight against former partner Asahi Kasei Corp (3407.TO) and appeal a U.S. court decision that awarded the Japanese drug maker $407.3 million in damages linked to a licensing dispute.

Actelion, Europe's largest biotech, said that even though the Superior Court of the State of California cut its original award by around $170 million, it will file an appeal in "due course" because Actelion "believe[s] that the jury verdict and the trial court's judgment are neither supported by the facts nor correct as a matter of law." Actelion said it "strongly believes there are significant grounds for a successful appeal."

Actelion earlier this year was embroiled in an investor fight over the Swiss firm's future strategy, after a series of drug development setbacks raised concerns over the company's viability.

The company this summer took a more than $500 million charge linked to its legal fight with Asahi, warning that the provision will hurt its full-year profit in 2011. Actelion said it will adjust the orignial provision to reflect the latest court verdict.

The dispute between Actelion and Asahi dates back to 2008, when the Japanese firm filed a complaint to solve a disagreement involving a pact between Asahi and Actelion's CoTherix unit for an experimental drug compound which had been terminated after Actelion's acquisition of CoTherix in 2007. Actelion paid more than $500 million for the acquisition and has spent nearly $100 million so far on the litigation with the Japanese drug maker.

"As expected, Actelion is escalating the case and going for an appeal," said Andrew Weiss of Bank Vontobel, adding that the lower award sum was immaterial, as Actelion will try to challenge the entire case.

Analysts said that even the reduced court damages would still be crippling for the Swiss firm and could siphon off a substantial part of Actelion's cash if it were to lose an appeal.

Still, the actual future of Actelion will depend on the trial outcome of macitentan, a follow-up drug for Actelion's blockbuster pulmonary hypertension medicine Tracleer.

Late stage data for macitentan are expected in the first half 2012 and a positive outcome would pave the way for a drug launch in 2013, allowing Actelion to protect its hypertension franchise, which will be hit in 2015 when Tracleer loses patent protection.

Tracleer is the clear leader in the pulmonary hypertension market, which is growing at double-digit rates and generates more than $2 billion in annual revenues, including drugs from companies such as Bayer AG (BAYN.XE) and Gilead Sciences Inc (GILD).

-By Goran Mijuk, Dow Jones Newswires, +41 43 443 80 47; goran.mijuk@dowjones.com

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