Alexion Pharmaceuticals Inc.'s flagship drug Soliris was denied patent protection through 2027 by the European Patent Office, exposing the company to biosimilar competition in Europe by 2023. Soliris accounted for about 86% of the company's net product in 2018.
The EPO decided not to grant two Soliris patents during a Sept. 5 oral hearing. Analysts said the outcome came as no surprise based on the EPO's prior decision to revoke one of Alexion's patents protecting a formulation of Soliris. The revocation was brought about by a challenge from Amgen Inc., which is developing a biosimilar version of Soliris.
"The decision solidifies Soliris' lack of [intellectual property] protection in Europe," Stifel analyst Paul Matteis wrote following the hearing. He rates the stock "hold."
Alexion said it will consider appealing the EPO's decision, though Leerink analyst Geoffrey Porges doubted its potential success.
Soliris sales could decline by 14% to 40% a year from 2023 to 2027, Porges said in a Sept. 5 note.
Soliris treats several rare diseases, including blood disease paroxysmal nocturnal hemoglobinuria and kidney condition atypical hemolytic uremic syndrome. Biosimilar versions of Soliris for these diseases will likely enter European markets in 2023. Soliris' use for autoimmune neuromuscular disease myasthenia gravis and rare central nervous system disease neuromyelitis optica spectrum disorder will remain protected by orphan drug exclusivity through 2027 in Europe.
Alexion is also switching patients to its next-generation version of Soliris, called Ultomiris. Porges expects the conversion rate to reach 39% in the EU by 2023, 56% by 2024 and 66% by 2025. Stifel's Matteis, however, said a "(hypothetical) risk" remains for Ultomiris, especially once Soliris biosimilar drugs arrive.
Meanwhile, Amgen is further challenging Soliris' patent protection in the U.S., where the Patent Office's Patent Trial and Appeal Board decided to review the validity of three Soliris patents that would extend the drug's exclusivity through 2027.
