Acrux Limited (ASX: ACR) shareholders look away now. The share price of the Australian drug delivery company has plummeted 37% this afternoon following news of an unfavourable court ruling in the United States on its Axiron patent.

According to the release the United States District Court for the Southern District of Indiana has ruled that the formulation and axilla application patents granted by the US Patent Office for Axiron have been invalidated.

As a result they would not be infringed by the commercialisation of generic versions of Axiron by the companies which have challenged the patents. Furthermore, the court ruled that the applicator patent is valid but not infringed by the majority of parties.

Axiron is the company’s largest commercial product and a prescription underarm testosterone medication used to help treat men with low testosterone. Last month Acrux confirmed that the product’s global licensee Eli Lilly and Company reported global Axiron sales of US$29.3 million for the quarter ending 30 June 2016. This meant that Axiron had a US market share of 14.2%, up from 14% in the prior corresponding period.

As Axiron contributed 84% of Acrux’s total half year sales, this is nothing short of a disaster for the company. Management expects the ruling will cause a material decline in Axiron’s sales and the royalties it receives from them.

Both the company and its licensee Eli Lilly and Company have expressed their disappointment with the ruling and advised that they plan to review the court’s decision before considering whether to appeal or not.

Only time will tell how negatively sales will be impacted by the decision, but I personally wouldn’t wait around to find out. Instead there are plenty of strong companies in the industry which could make far better investments such as CSL Limited (ASX: CSL) and Mayne Pharma Group Ltd (ASX: MYX).

Lastly, now might be an opportune time to check to see if you have either of these three wealth-destroying ASX shares in your portfolio if you ask me.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.