Pfizer (PFE) traded up about 2.5% ($0.52) to a new 52 week high of $21.45 and Teva (TEVA) settled up 0.8% as the two parties settled a patent infringement lawsuit related to Teva subsidiary IVAX Pharmaceuticals' generic version of Neurontin. Neurontin is used to treat partial seizures in epileptic patients. The settlement provides a full release to Teva and its subsidiaries. Financial terms were not disclosed.
While Pfizer gets some benefit from the financial settlement, it is unlikely that this news was the main driver in Pfizer's price movement today. More likely the stock's continued momentum is due to improving fundamentals and Pfizer and a belief by many that the shares are undervalued, even with Pfizer's upcoming patent expirations. The 3.8% dividend yield is also very attractive.