Global generic and specialty pharmaceutical company Mylan NV reported the US Patent and Trademark Appeal board had concluded in its favor in a patent controversy with France’s Sanofi SA (NYSE: SNY). In other, but related news, CFRA upwardly revised Mylan NV’s stock to buy from hold and said the company’s grim days are behind them.
US Patent Board’s ruling and CFRA’s upgrade
The Patent and Trademark Appeal board nullified patents (US Patent Nos. 7,476,652 and 7,713,930) related to Sanofi’s Lantus, a long-active insulin prescribed to adults suffering from type 2 diabetes and adults and children living through type 1 diabetes to keeping their blood sugar under control. The judgment quashes both patents of Lantus.
In October 2017, Sanofi filed a patent breach case against Mylan’s New Drug Application (NDA) in the US District Court of New Jersey. This includes two formulation patents for Lantus and other licenses for the Lantus injection pen SoloSTAR.
Mylan presently has a new application for drugs awaiting an assessment of Lantus’ generic versions. Evercore analyst, Umer Raffat, said that the information could be “one of the most meaningful launch opportunities for MYL in the next 18-24 months (particularly due to the fact that the other Gx Lantus developer Merck has decided to pull out).”
Mylan’s 505(b)(2) NDA for generic versions of Lantus and Lantus SoloSTAR is currently being examined in the United States. Mylan has joined hands with Biocon to develop the generic version.
The news bodes well for Mylan, given the likely demand for Lantus. For the year ending October the 31st, 2018, Sanofi’s total IQVIA sales were approximately $2.14 billion for Lantus 100 Units/mL and roughly $4.39 billion for Lantus SoloSTAR.
Furthermore, a likely endorsement of the generic version of Lantus should improve Mylan’s generic portfolio, which has been facing a few challenges recently.
Mylan canceled numerous products preemptively while shifting some to other locations. This has led to a brief interference in the supply of some products and a decrease in generic sales in North America.
Mylan stock trades at a five year low after a flurry of struggles during the past two years, including a squabble over a price hike for its EpiPen treatment for acute allergic reactions, generic price depreciation, and regulatory issues at some production sites.
In a note to clients, analyst Colin Sarcola wrote: “We think the worst days are over, however, and forecast improved profit margins in 2019 as competition in the generic industry appears to be mitigating – FDA generic approvals are on track to decrease in 2018, marking the first decline since 2014. We think MYL can lead a potential turnaround in industry earnings in 2019 as it has remained focused on R&D through the downturn while many competitors have pulled back.”
Furthermore, Sarcola stuck to its 12-month price target of $43, or roughly 43% above Friday’s closing price.
Aspen Pharmacare has reached an agreement with the US generics manufacturer Mylan to distribute a range of prescription and over-the-counter drugs in Australia and NZ.
The agreement inked between Mylan and Aspen Global Incorporated and its Australian subsidiaries allows the former to buy the portfolio for roughly $188 million ($136 million), the company stated. The facts discussed above are likely to have a positive impact on the stock in the week ahead.
Technically, the stock has formed a double bottom at 30. Furthermore, the stochastic is in the oversold region. As a result, we can expect the stock to move up in the short-term.
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