Patent Fight Between Amgen And Sanofi/Regeneron Getting Murkier, Says Analyst

Published: Nov 14, 2014

Patent Fight Between Amgen And Sanofi/Regeneron Getting Murkier, Says Analyst

November 13, 2014

By Riley McDermid, Breaking News Sr. Editor

The patent fight between Amgen and Sanofi and Regeneron over the possible infringement of its PCSK9 patents is getting complicated after a U.S. Food and Drug Administration decision this week left both companies strategies unclear, said Mark Schoenebaum, biotech analyst and medical doctor with ISI Group, on Thursday.

On Oct. 17, Amgen sued Sanofi and Regeneron for infringement of its patents that describe and claim monoclonal antibodies to proprotein convertase subtilisin/kexin type 9 (PCSK9). But on Monday, the FDA accepted Amgen’s Biologics License Application for evolocumab with a standard 10 month review and set a target Prescription Drug User Fee Act date of Aug. 27, 2015.

For their part, Sanofi and Regeneron have said they intend to file alirocumab by year end 2014The companies have set they intend to use their Priority Review Voucher to designate alirocumab for 6 month priority review.

All that activity has Wall Street analysts wondering how any eventual legal fight will play out.

“Amgen patents are broad, but the risk is that they are too broad. This raises the question of validity. More specifically, in our view, the Amgen patents contain additional info on PCSK9 binding that REGN patents lack,” said Schoenebaum in a note to investors. Additionally, Amgen patents seem to cover any antibody which contacts important regions of PCSK9. “Of course, this may be perfectly acceptable in the eyes of the court, and if that is true, then Amgen patents appear fairly robust,” he said. “However, common sense tells us that such broad patents may just as likely be susceptible to criticism because of the magnitude of how broad they actually are (or appear to us, at least).”

In addition, it appears Sanofi can still file for approval / launch, and that litigation should not impact FDA timelines or decisions.

“We spoke with an attorney (briefly) to get his take not on the patents themselves but on the dynamics of the situation. The possibility exists here that Amgen seek to get a preliminary injunction,” said Schoenebaum.

However, getting a court to grant such an injunction is difficult and unlikely, he said, because Amgen would have to make a strong case on the merits that by Sanofi launching it would somehow cause irreparable harm, and that such harm cannot be quantified.

“Typically, damage can be quantified. Thus, what is more likely to happen is that Sanofi files and seeks to launch and if they lose, they pay Amgen damages,” said Schoenebaum. “Very preliminarily and rough rule of thumb, damages here are more likely to be closer to 1x sales (not a multiple of sales).”

ISI said that their early/preliminary guess is that an injunction is unlikely (but not impossible) and that the most realistic "upside" outcome for Amgen would be a requirement for Regeneron to pay Amgen an ongoing royalty.

“This would likely take several years to fully sort out (unless there is a settlement sooner) and would represent pure upside to our Amgen model,” he said. Peak consensus sales estimates of Regeneron/Sanofi's PCSK9 are around $3.3 billion. “Thus, a 3 percent royalty would translate into around $100 million in royalty payments. This would boost out year AMGN EPS estimates by around 1 percent.”

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