The October 2014 lawsuit sought to stop Paris-based Sanofi and Tarrytown, New York-based Regeneron from selling Praluent, which Regeneron developed and is meant to lower “bad” LDL cholesterol by blocking a protein known as PCSK9. His target has been cut by $50 to $325.
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“This increases the likelihood of a settlement, where Sanofi/Regeneron may owe a 5-10 percent royalty to Amgen”, said Yee, who has an outperform rating on Amgen. A follow-on hearing on Amgen’s request for a permanent injunction is scheduled for March 23-24. In such a situation, both Regeneron and Sanofi may have to pay royalty payments for infringing patent laws. The company will take this case to Federal Circuit Court of Appeals that hears appeals related to biopharmaceutical patent lawsuits.
Shares of Regeneron were last seen down 0.8% at $364.13 after they resumed trading on Wednesday afternoon. Insurance companies have been reluctant to reimburse for the drugs’ use pending the outcome of large, cardiovascular outcome clinical trials.
Earlier this year, Amgen’s chief commercial officer, Tony Hooper, said he was optimistic about the drug’s long-term projects as the company works with payers and gets outcomes information on the drug.
The treatments are more expensive than other cholesterol-lowering treatments, with a list price topping $14,000 annually.
Sanofi’s strengths such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins are countered by weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself. The two drugs are similar, both being proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitors.
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Evercore analyst Mark Schoenebaum said in a research note that Amgen’s patents were broad, so a key question was whether or not they would be deemed valid. Recall, no new arguments are able to presented in the Appeals Court (appeal is fact-based) and so the bar is relatively high.
