Teva Pharmaceutical says its US unit has settled a patent dispute over a herpes treatment made by Novartis.
Teva launched a generic version of the drug Famvir in 2007.
Under the agreement announced Monday, Teva will make a one-time payment to Novartis in addition to ongoing royalties from US sales.
That frees Teva to market and sell the drug in the United States.
Exact monetary figures were not released.
Shares of Teva Pharmaceutical Industries Ltd., which is based in Israel, slid 45 cents to $58.41 Tuesday. Shares of Novartis rose 1 cent to $53.72.