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Sanofi/Regeneron Disagree With Jury Verdict in Amgen's Favor

Zacks Equity Research

Sanofi SNY and partner Regeneron Pharmaceuticals, Inc. REGN strongly disagreed with a Delaware jury verdict that upheld the validity of three of five asserted claims of two U.S. patents owned by Amgen, Inc. AMGN for its PCSK9 inhibitor, Repatha. Notably, Sanofi and Regeneron also market a PCSK9 inhibitor, Praluent. The companies believe that all Amgen’s asserted U.S. patent claims are invalid based on lack of written description.

Sanofi/Regeneron intend to appeal against the jury verdict and request a new trial. The two patents describe and claim monoclonal antibodies of PCSK9.

In October 2014, Amgen had filed a patent infringement lawsuit against Sanofi and Regeneron in the U.S. District Court of Delaware to prevent the manufacture, use and sale of Praluent. In March 2016, a Delaware jury ruled in favor of Amgen declaring that the two patents were valid, and that Sanofi and Regeneron had failed to invalidate them due to the lack of written description and enablement. In January 2017, the U.S. District Court in Delaware granted Amgen permanent injunction against infringement by Sanofi and Regeneron of two patents owned by Amgen for Repatha. Later, a federal circuit court reversed in part the judgment of the Delaware district court and demanded a new triaI.

We note that both Repatha and Praluent are used to inhibit a protein known as PCSK9, which lowers the liver's ability to remove "bad" cholesterol (LDL-C) from the blood. While both the drugs hit the market in 2015 within a month, the companies have been working rigorously on securing deals with health insurers and pharmacy benefit managers. However, sales of both these PCSK9 inhibitors have been below expectations since launch due to payer restrictions. Despite Sanofi/Regeneron and Amgen’s efforts to improve access to their products, patients face significant hurdles due to high co-pay expenses.

Earlier this month, Sanofi/Regeneron announced a 60% cut in the U.S. list price of Praluent, following a similar action last year by Amgen to improve access and affordability of the product. The price cuts have been taken to encourage payers to improve access to Praluent and Repatha, which will encourage use of these drugs. It goes without saying that the price cuts will significantly dent Sanofi’s and Amgen’s profits from their respective PCSK9 inhibitors.

Sanofi’s shares have risen 7.7% in the past year. Sanofi currently carries a Zacks Rank #3 (Hold).

Sanofi Price and Consensus

 

Sanofi Price and Consensus

Sanofi price-consensus-chart | Sanofi Quote

A better-ranked large-cap pharma stock is Glaxo GSK, carrying a Zacks Rank #2 (Buy). Shares of Glaxo have risen 16.8% in the past year while earnings estimates for 2019 have risen 1.4% in the past 30 days.

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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
 
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