Galen has completed an agreement with Barr Laboratories to settle pending patent litigation between the two companies over the oral contraceptive Estrostep and the hormone therapy product femhrt.

Under the terms of the agreement, New Jersey-based Barr has the right to launch generic versions of the products six months prior to patent expiry, which would be October 2007 for Estrostep and November 2009 for femhrt.

The agreement concludes a three-part deal with Barr, which was originally announced on September 11th last year. The deal was due to close on February 1st but this was delayed when the competition bureau of the Federal Trade Commission (FTC) decided to look into it.

However, the FTC did not proceed with an investigation and in March, Galen reached agreement with Barr on two parts of the deal, leaving agreement on the details of the settlement outstanding.

Analysts said the completion of the Barr deal removed the uncertainty created when the FTC announced it was reviewing the transaction.

"While today's announcement is just the completion of a previously announced deal, there had been concerns over the length of time it was taking to conclude the process. Consequently, today's closure without amendment should lift sentiment for the stock," said Mr Peter Frawley, analyst at Merrion Stockbrokers.

He added the agreement was positive for Galen as it removed the uncertainty surrounding the timing of the launch of generic versions of the products.

However, Galen shares lost 11 pence sterling in London, their main market, to close at 790 pence yesterday. In Dublin, they closed unchanged at €12.21.

In a separate agreement, Galen has granted Barr a royalty- bearing licence to develop certain oral contraceptives