Shire PLC (SHP.LN) said Wednesday it settled litigation with Swiss generics maker Sandoz over production of a generic version the U.K. pharmaceutical company drug Adderall XR, a treatment for attention deficit hyperactivity disorder, or ADHD.

Sandoz, a unit of Novartis AG (NVS), gets a license to market the generic version of Adderall in the United States as soon as it gets a green light from the Food and Drug Administration, and will pay Shire royalties from those sales, Shire said in a statement.

Sandoz will not receive any payments from Shire under the agreement.

So far, Barr Pharmaceuticals, a unit of Israeli generics company Teva Pharmaceutical Industries Ltd. (TEVA.TV), and Impax Laboratories Inc. (IPXL) are the only authorized generic suppliers of Adderall, according to Shire's statement.

Adderall XR began to see generic competition in April this year, but Shire is hoping to keep its ADHD franchise stable with other treatments for the disease, the already marketed Vyvanse and the recently approved Intuniv.

Analysts see sales potential of more than $2 billion for Vyvanse, helping cover the gap in sales from the Adderall patent expiry.

In 2008, Shire generated sales of $1.1 billion from Adderall but that's expected to fall to $579 million this year due to the launch of generic versions and the newer drug Vyvanse, according to Citigroup analysts.

The analysts see Vyvanse sales of $535 million in 2009 after $319 million in 2008.

Novartis confirmed the agreement between Sandoz and Shire but wasn't immediately available to provide further detail.

Company Web Site: http://www.shire.com, www.novartis.com, www.sandoz.com

-By Julia Mengewein, Dow Jones Newswires; +41 43 443 80 45; julia.mengewein@dowjones.com