UPDATE 2-U.S. ruling knocks Labopharm, Biovail shares lower

* Ruling paves way for new competition for once-daily drug

* Analyst sees $10 mln-$15 mln Biovail revenue hit in '09

* Biovail shares down 1.7 pct; Labopharm falls 11.7 pct (In U.S. dollars unless noted)

TORONTO, Aug 17 (Reuters) - Shares of Canadian drugmakers Biovail Corp (BVF.TO: Quote, Profile, Research) and Labopharm Inc (DDS.TO: Quote, Profile, Research) dropped on Monday after a U.S. court ruling that will lead to more competition for a popular painkiller, variations of which are produced by the two companies.

Labopharm shares fell 11.7 percent to C$1.73, while Biovail shares were down 1.7 percent at C$14.98 on the Toronto Stock Exchange.

Late last week a court in Delaware ruled in favor of U.S.-based generic drugmaker Par Pharmaceuticals Inc in a patent-infringement case against Purdue Pharma related to tramadol hydrochloride extended-release painkiller tablets.

Purdue is patent holder of the drug in question in the case.

Biovail sells a generic version of the drug under the name Ultram ER, while Labopharm manufactures its own once-daily tramadol product Ryzolt, which is marketed in the United States by Purdue.

The court's decision, coupled with tentative U.S. approval for Par's version of the drug, bring Par close to launching its own generic product, which will cut into Biovail and Labopharm's market.