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With so many high-profile pipeline setbacks over the past couple of years, could the tide be turning back in Takeda’s (TKPHF.PK) favor with regard to one of its biggest and most valuable products?

Wednesday’s patent litigation settlement with Watson Pharmaceuticals (WPI) will delay the launch of Watson’s generic version of key diabetes drug Actos until August 2012, a full 19 months after expiry of the drug’s main patent in January 2011, the point at which the market is currently expecting significant generic competition. If Takeda can similarly ward off other generic threats the gains could be significant, adding $1.9bn to profits from Actos (see tables below). Takeda’s shares gained 1% in trading Thursday to reach a 12-month high of ¥4,075.