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Chardan: Sell Regeneron After Sanofi Drops Patent Infringement Bombshell

Chardan: Sell Regeneron After Sanofi Drops Patent Infringement Bombshell
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  • Regeneron Pharmaceuticals Inc (NASDAQ: REGN) shares have been trending south this year, and are down 33 percent since January 4.
  • Chardan Capital Markets’ Gbola Amusa maintained a Sell rating for the company, with a price target of $400.
  • Acceptance by Regeneron Pharmaceuticals’ partner firm on infringement of Amgen patents means potential royalty payments and loss of income, Amusa stated.

Analyst Gbola Amusa mentioned that Regeneron Pharmaceuticals’ partner firm Sanofi SA (ADR) (NYSE: SNY) had accepted that their anti-PCSK9 drug Praluent infringed the PCSK9 patents of Amgen, Inc. (NASDAQ: AMGN).

Amusa pointed out that the evidence of infringement was visible in the patent filings of Sanofi and Regeneron Pharmaceuticals. These filings provide details of the manner in which Praluent functions as a PCSK9 mAb.

“We find this pattern of referencing specific drugs in patent applications by Sanofi/Regeneron to be a glaring oversight, as keeping specific references to pipeline products out your patent filings is one of the most basic aspects of patent drafting, as a party's patent filings then serve to create a public record of your product, exposing you in litigation situations like this one,” the analyst wrote.

The stipulation by Sanofi means the two parties agree to the matter of Sanofi/Regeneron infringement and will not argue it in court; and instead opt for settlement of the issue.

Amusa believes that a settlement could lead to Sanofi and Regeneron Pharmaceuticals owing significant royalties to Amgen, which would mean a significant transfer of potential operating income per year to Amgen.

Latest Ratings for REGN

Aug 2016BairdDowngradesOutperformNeutral
Jun 2016BernsteinInitiates Coverage onOutperform
Apr 2016Wells FargoDowngradesOutperformMarket Perform

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