Amgen Inc. AMGN announced that an appeals court ruled in its favor, upholding the validity of two patents on its blockbuster rheumatoid arthritis drug Enbrel against Novartis’ NVS generic arm, Sandoz.
The United States Court of Appeals for the Federal Circuit affirmed the August 2019 decision of a district court of New Jersey that had also upheld the validity of the two patents. The two patents describe and claim Enbrel and methods for making it.
Sandoz received FDA approval for the biosimilar version of Enbrel, Erelzi in August 2016. However, Erelzi could not be launched in the United States due to the ongoing litigation with Amgen. The latest appeals court ruling prevents Sandoz from making or launching Erelzi.
Amgen’s shares were up more than 8% on Wednesday as the appeals court’s decision removes a key overhang. The company’s shares have risen 5.8% this year so far against 12.1% increase registered by the industry during this period.
Novartis may try and get the Supreme Court to review the Appeals court’s decision. Amgen, in most likely case, will have patent protection for Enbrel through late 2028.
Despite lower demand hurting volumes of Enbrel, it remains the largest drug for Amgen, generating sales of $1.15 billion in the first quarter of 2020. Biosimilars of Enbrel are already eroding its revenues in the ex-U.S. market. The drug would face a rapid erosion in its sales if a biosimilar version would have been launched in the United States. We remind investors that Pfizer PFE has exclusive rights to Enbrel outside the United States and Canada.
Sandoz was the first company to receive FDA approval for a biosimilar version of Enbrel. The FDA had approved Erelzi for the treatment of multiple inflammatory diseases. In April 2019, the FDA approved a second biosimilar version of Enbrel, Eticovo made by Samsung Bioepis. Amgen is also in a similar litigation with Samsung Bioepis. The favorable Sandoz appeals ruling increases Amgen’s chances of winning against Samsung Bioepis as well.
Biosimilars are having a negative impact on several of Amgen’s other drugs like Neupogen, Neulasta, Epogen, as well as Sensipar, which are eroding their sales.
Amgen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A better-ranked biotech stock is Regeneron Pharmaceutical REGN, which carries a Zacks Rank #2 (Buy).
Regeneron’s earnings estimates for 2020 and 2021 have risen 10.5% and 3.1%, respectively over the past 60 days. The stock has gained 62.2% this year so far.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research