Regeneron and Sanofi Get Favorable Ruling Against Amgen

Regeneron Pharmaceuticals, Inc, REGN and partner Sanofi, Inc. SNY received a favorable ruling from the Court of Appeals for the Federal Circuit relating to Praluent. The court ordered a new trial and vacated the permanent injunction in the dispute concerning Amgen, Inc. ’s AMGN asserted patent claims for antibodies targeting PCSK9 (proprotein convertase subtilisin/kexin type 9). 

As a result, Sanofi and Regeneron will continue to commercialize Praluent in the United States.

We note that Praluent was the first PCSK9 antibody to be approved as adjunct to diet and maximally-tolerated statin therapy. It is used for the treatment of adults with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease, who require additional lowering of "bad" (LDL) cholesterol in the United States. Amgen’s Repatha was introduced much later in the market.

We remind investors that Amgen asserted a number of U.S. patents, which were subsequently narrowed to patent Nos. 8,829,165 (the '165 Patent) and 8,859,741 (the '741 Patent), and sought a permanent injunction to prevent Regeneron and the Sanofi defendants from commercializing Praluent.

It was found that the trial court erred on multiple grounds without any substantial evidence regarding written description and enablement. The jury also claimed that the law requires "a written description of the invention’’ and concluded that Amgen's patents were non-obvious. The lack of evidence helped Regeneron and Sanofi to win a favorable ruling.

The date for the new trial has not been decided by the court yet. Both Regeneron and Sanofi do not anticipate any new trial proceedings to start in 2017.

The news should relieve Regeneron and Sanofi. Earlier, Amgen was granted a permanent injunction prohibiting Sanofi and Regeneron from selling Praluent during the term of two of Repatha patents. However, Regeneron and Sanofi appealed against the ruling in a higher court.

 

Following the news, shares of Regeneron have moved up. In fact, shares of the company have outperformed the industry year to date. The stock has surged 26.2% compared with the industry’s 16% rally during the period.

Prospects of PCSK9 inhibitors, a new class of cholesterol-lowering treatments with blockbuster potential, gained instant popularity even before hitting the market, However, sales of Praluent have failed to impress as the drug is facing significant payer utilization management restrictions in the United States and limited market access in Europe, which are resulting in a low volume of prescriptions.

Zacks Rank & Key Pick

Regeneron currently sports a Zacks Rank #3 (Hold).

A better-ranked stock in the healthcare sector is Aduro Biotech ADRO which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Aduro’s loss estimates per share have narrowed from $1.36 to $1.29 for 2017 over the last 60 days. The company delivered positive earnings surprises in two of the trailing four quarters, the average being 2.53%.

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