Shire plc SHPG announced that two petitions have been filed with the U.S. Patent and Trademark Office (USPTO) on Apr 2 by Hayman Capital Management. The petitions are related to Shire’s drugs – Lialda and Gattex.
We note that Lialda is indicated for both the induction of remission of mild-to-moderate ulcerative colitis and for the maintenance of remission of ulcerative colitis.
Currently, Lialda is protected by the following patent listed in the FDA Orange Book: U.S. Patent No. 6,773,720. This patent expires in 2020. We note that Shire is currently involved in multiple lawsuits for Lialda with various companies such as Mylan MYL, among others.
Lialda is one of the key drugs in Shire’s portfolio. Sales of Lialda came in at $634 million in 2014, up 20% year over year. Moreover, no generic version of Lialda has been approved yet.
On the other hand, Gattex is approved in the U.S. to treat adults with short bowel syndrome, who are dependent on parenteral support. The drug enjoys orphan drug status in the U.S. until Dec 2019. Gattex is covered by FDA Orange Book patents, which expire in 2015, 2022 and 2025.
However, the recently-filed petition only challenges a subset of claims of the patent, which expire in 2022. We note that Gattex was added to Shire’s portfolio following the acquisition of NPS Pharma in Feb 2015. Hence, Shire intends to defend both these patents vigorously.
Shire currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Actavis plc ACT and Lannett Inc. LCI. Both carry a Zacks Rank #2 (Buy).
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