Zacks Investment Research downgraded Supernus Pharmaceuticals, Inc. (SUPN) to a Zacks Rank #4 (Sell) on Jan 20.
Why the Downgrade?
Over the last few quarters, Supernus has been occupied with a number of patent infringement lawsuits related to its lead products Trokendi XR and Oxtellar XR.
Trokendi XR, launched in the third quarter of 2013 for the treatment of epilepsy, has five patents and is protected at least till 2027. Oxtellar XR was launched in Feb 2013 for the treatment of epilepsy and is protected by four patents listed in the FDA's Orange Book, all of which are valid at least till 2027.
Trokendi XR and Oxtellar XR are the only marketed products at Supernus. Hence, the earlier-than-expected entry of generic versions of either of these drugs would adversely affect the company’s financials.
Earlier in the month, Supernus sued Par Pharmaceutical Companies, Inc. for infringement of four patents covering its antiepileptic drug Trokendi XR. We note that last month, Supernus received a Paragraph IV notice from Par Pharmaceutical related to the approval of Par Pharmaceuticals’ generic version of Trokendi XR in the U.S. Supernus is facing a number of similar challenges from other companies as well both for Trokendi XR and Oxtellar XR.
Meanwhile, the Zacks Consensus Estimate for 2014 declined by a penny to 36 cents per share over the last 30 days. For 2015, the Zacks Consensus Estimate also declined by a penny to 39 cents per share over the past one month.
Other Stocks to Consider
Not all health care stocks are performing as poorly as Supernus. Better-ranked stocks in the space include Alexion Pharmaceuticals, Inc. (ALXN), Amgen Inc. (AMGN) and Celgene Corporation (CELG), all of which carry a Zacks Rank #1 (Strong Buy).
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