Patent Trial And Appeal Board Hands Sarepta Another Big Win

Sarepta Therapeutics Inc SRPT announced Tuesday that the Patent Trial and Appeal Board issued two favorable decisions for Sarepta which refused BioMarin Pharmaceutical Inc. BMRN's claims.

In a report, Brian Skorney of Baird suggested the PTAB's ruling implies Sarepta "may avoid paying royalties" to BioMarin in the US.

As a reminder, BioMarin and Sarepta were engaged in three separate interference battles, the first regarding composition of matter for its exon-51 skipping, the second for the composition of its exon-53 skipping and one on methods of use related to exon-51 skipping targeting the dystrophin gene.

Related Link: Sarepta Share Price Doubles Since Benzinga Broke News of Dr. Farkas' FDA Departure

The analyst said the second and third interference battle was already ruled in favor of BioMarin but Tuesday's decision, concerning the exon-51 skipping, was ruled in favor of Sarepta.

"BioMarin can appeal the decision, but as things stand right now, Sarepta has valid composition of matter patents on eteplirsen and SRP-4053 that do not infringe on any of BioMarin's patents in the U.S," Skorney explained.

Skorney also noted his valuation models aren't assuming any royalties paid to BioMarin, especially after its decision to discontinue its entire line of DMD oligos back in May.

A decision in Europe is still pending, but if a royalty payment is required by Sarepta, it will likely be a low-single-digit percentage of sales.

"Bears will argue that IP is still in dispute and therefore Sarepta still doesn't have 'true' freedom to operate," the analyst concluded. "However, we would ask how many drugs have IP completely resolved. Show us ten long positions and we'll show you nine companies with unresolved IP."