(Reuters) - Somaxon Pharmaceuticals Inc protected the market exclusivity for its insomnia treatment till 2020 by settling separate patent lawsuits with Mylan Pharmaceuticals and Par Pharmaceutical Cos Inc.
Somaxon shares jumped 146 percent on the news in extended trading. They closed at 26 cents on Tuesday on the Nasdaq.
The settlement gives Mylan the right to sell a generic version of Silenor -- an insomnia treatment -- from January 1, 2020 or earlier under certain circumstances for a period of 180 days.
Mylan's right to sell the product could extend for a period of 360 days, and will have the non-exclusive right to sell a generic version of the drug after the period.
Somaxon said Mylan has agreed to supply the company with commercial quantities of Silenor 3 mg and 6 mg tablets.
Somaxon, which also struck a deal with Par Pharmaceutical, gave the generic drugmaker the right to market a copycat version of the drug 180 days after a generic version of Silenor is sold in the United States by a third party.
Silenor, which is the only source of revenue for Somaxon, is expected to rake in sales of about $2.8 million to $2.9 million in the second quarter, the company said.
The San Diego, California-based company, which in December said it was exploring strategic alternatives that included a sale, sold $2.7 million worth Silenor in the first quarter.
(Reporting by Balaji Sridharan in Bangalore; Editing by Maju Samuel)