5 Key Takeaways In Regeneron's Praluent Suit, Steps Forward

After market close on January 5, it was announced that U.S. Federal District Court Judge Sue Robinson had ruled to issue a permanent injunction against Praluent, the PCSK9 mAb for hypercholesterolemia from partners Regeneron Pharmaceuticals Inc REGN and Sanofi SA (ADR) SNY due to infringement of patents from Amgen, Inc. AMGN.

Chardan Capital’s Gbola Amusa maintains a Neutral rating on Regeneron Pharma, while lowering the price target from $350 to $345.

Key Takeaways

Following consultations with a legal expert, the analyst listed five key takeaways:

1. “The court has imposed a 30-day suspension (stay) on the injunction to allow for settlement or appeal of the District Court decision. Sanofi and Regeneron have announced their intent to appeal the ruling to the US Court of Appeals for the Federal Circuit (CAFC).”
2. A final decision on the appeal is unlikely in 2017, with the CAFC more likely to give its decision by early 2018.
3. Historical precedent indicates that the CAFC is likely to uphold the injunction. Amusa believes there is a more than 75 percent chance that Amgen will prevail and/or Praluent would be eventually removed from the U.S. market, and/or Amgen would agree to a settlement meaningfully in its favor.
4. “If Sanofi and Regeneron are unsuccessful on appeal, they will be liable for Praluent economics gained during the stay period. Since an injunction was issued, the likely monetary award would be lost profits, which reflect the profits that Amgen was unable to realize due to Praluent product sales,” the analyst stated.
5. Amusa believes a settlement is “highly unlikely” following the injunction.

Stock Movements

At last check:

• Amgen shares were up 4.51 percent at $159.88 in Friday's pre-market session.
• Regeneron shares were down 5.75 percent at $359.
• Shares of Sanofi were down 3.25 percent at $41.50.