The Medicines Company MDCO received disappointing news with the U.S. Court of Appeals for the Federal Circuit Court ruling against the company in its patent infringement lawsuit against Hospira, Inc. HSP for its anticlotting drug, Angiomax (bivalirudin).
We remind investors that in late March last year, the U.S. District Court of Delaware had ruled that the patents protecting Angiomax – U.S. Patent Nos. 7,582,727 (the ‘727 patent) and 7,598,343 (the ‘343 patent) – to be valid but not infringed by Hospira's abbreviated new drug applications for its generic version of Angiomax. Both companies had appealed the ruling back then with The Medicines Co. appealing the claim construction and non-infringement rulings and Hospira appealing the patent validity findings.
The Federal Circuit ruled that the ‘727 patent and the ‘343 patent are invalid. The patents were set to expire in Jul 2028.
The Medicines Co. is evaluating the Court’s ruling before considering options in this matter. While The Medicines Co. has settled its patent infringement lawsuit regarding Angiomax with Teva Pharmaceutical Industries Ltd. TEVA, Sun Pharmaceutical Industries Ltd. and APP Pharmaceuticals, it is still entangled in patent litigations with other generic makers seeking approval for their generic versions of the product.
Our Take
The U.S Court’s ruling is a major disappointment for The Medicines Co. With Angiomax, the company’s lead product, contributing almost 83% to total revenues in the U.S. in 2014, the earlier-than-expected entry of generic versions of Angiomax would be a major setback.
The Medicines Co. recorded a significant year-over-year decline in Angiomax revenues in the first quarter of 2015 due to uncertainty regarding patent exclusivity. The Medicines Co. expects sales to decline further in the second quarter of 2015. Though the company did not provide any guidance for 2015 while releasing its first-quarter results, it might provide a guidance shortly.
Currently, The Medicines Co. is focusing on the launch of its recently approved products including Kengreal (antiplatelet agent), Ionsys (acute postoperative pain), Orbactiv (infection) and a new formulation of Minocin IV (infection). These drugs should lessen the impact of the loss of Angiomax revenues.
The Medicines Co. carries a Zacks Rank #3 (Hold). Eleven Biotherapeutics, Inc. EBIO is a better-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).
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