(Reuters) -A U.S. judge ruled in favor of Israel's Teva Pharmaceutical Industries (NYSE:TEVA) in a patent infringement lawsuit brought by Corcept Therapeutics (NASDAQ:CORT), sparking a frenzied sell-off in shares of the California-based drug developer.
Corcept's shares fell nearly 38% in trading after the bell.
The lawsuit was tied to Korlym, Corcept's drug to treat Cushing's syndrome, which creates an excess of the hormone cortisol and causes high blood sugar, among other things.
Teva has been looking to sell a generic version of Corcept's Korlym drug. Its application to do so was approved by the U.S. Food and Drug Administration in 2020, but it has not yet launched its product.
Corcept had failed to demonstrate a likelihood of direct infringement of its patent by Teva, a United States district judge ruled.
The companies did not immediately respond to Reuters requests for comment.