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Sanofi, Regeneron get breathing room for Amgen rival after court decision

With a U.S. court decision that scraps Amgen Inc.'s current case against Sanofi and Regeneron Pharmaceuticals Inc., the companies are back at square one in a testy patent fight.

The U.S. Court of Appeals for the Federal Court dismissed a permanent injunction against sales of Sanofi and Regeneron's Praluent, a rival to Amgen's Repatha, invalidating a previous verdict that allowed Amgen to enforce patents related to the super effective new class of cholesterol drugs known as PCSK9 therapies.

The decision could ease pressure on Praluent sales. Though Sanofi and Regeneron could continue marketing the drug while the case was in appeal, it pulled in $46 million in worldwide sales in the second quarter of this year, below consensus expectations and eclipsed by the two companies' marketing expenses during that time.

There is potential that the reprieve could be short-lived. The federal court decision hinged on errors during a previous trial and not on patent infringement itself, which Sanofi and Regeneron have already admitted to, Barclays analyst Geoff Meacham said in a note. The Praluent makers are making the argument that the patents themselves are invalid.

The latest court opinion supports the idea of a settlement including a licensing agreement in the future, Meacham said. That the companies would choose to start litigation over again in district court, or that Amgen would appeal to the U.S. Supreme Court, both seem unlikely, he added.

Yet Amgen may not be ready to give up the fight. In a statement, that company said, "We firmly believe in the validity of our patents and we look forward to reasserting our rights in court." It also pointed out that the court rejected the defendants' argument to overturn the injunction.

The odds of the Supreme Court accepting the case are extremely low, Evercore ISI analyst Umer Raffat said in a note. However there is a small victory for Amgen in the court's refusal to overturn the injunction, he added. In particular, it rejected the defendants' argument that Amgen's attempt to block competition was a disservice to the public.

"We are pleased with the Federal Circuit's decision to remand for a new trial that allows us to present our complete evidence to the jury," Sanofi said in a statement. "It is our longstanding position that Amgen's asserted patent claims are invalid, and we remain confident in the long-term availability of Praluent for patients."

Both drugs have struggled to fully take off, with payers hesitant to cover their more than $14,000 price tags. Yet there is a window of opportunity for Praluent with outcomes for an 18,000-patient study expected in early 2018. A similar trial for Repatha widely disappointed payers and analysts earlier this year and has fed payer unwillingness to extend coverage beyond the most severely high cholesterol patients.

Meacham predicted $129 million in U.S. Praluent sales through the end of this year, versus $281 million for Repatha. The court decision did not change Barclays' view on either Amgen or Regeneron, which are both rated "Equal Weight/Positive."