Deutsche Bank Comments on Amgen (AMGN)-Sandoz Ruling and Read to Abbvie (ABBV) and Biosimilars

Deutsche Bank analyst Robyn Karnauskas commented on Abbvie (NYSE: ABBV) following a court ruling blocking the launch of Neupogen's biosimilar Zarxio from Sandoz, noting the implications of this ruling on biosimilars. Karnauskas pointed out current consensus for Humira Biosimilar launch is 2017, but every one year delay in the US Humira launch would add $4 per share to Abbvie's DCF value.

"This morning, the appeals court ruled against blocking the launch of Neupogen biosimilar Zarxio from Sandoz while throwing a potential 6 month incremental lifeline to Neupogen as well. We note implications of this ruling on biosimilars. More specifically the Appeals court noted that the sharing of BLA and subsequent patent dance is not mandatory. This could potentially expedite the Biosimilar launch. On the other hand, the district court sided with AMGN saying that the 180 day notice of commercial marketing can only be given post approval. This would lead to a further 6 month delay in launch post FDA approval of any biosimilar product," said Karnauskas.

"We are currently modeling biosimilar launch in 2017 (right after patent expiry in Dec’16) & we believe current ABBV stock price also factors in biosimilar erosion starting 2017. AMGN noted that they could file for approval in Q4’15. After today’s court decision, AMGN may or may not opt for patent dance under BPCIA. If AMGN opts for BPCIA, this could potentially cause a delay in launch. We note that AMGN has filed IPR for two of the Humira patents. However, we do not know if these are the patents Amgen believes they might infringe," continued the analyst.

Karnauskas added, "Court noted that not sharing BLA is not a violation of BPCIA given that there is one remedy under BPCIA (Based on a claim of patent Infringement). Therefore, the path Sandoz used a process which was contemplated in BPCIA, therefore, Sandoz did not violate BPCIA. The court, however, remanded to the district court to consider the patent infringement claim and counterclaims relating to the ’427 patent and any other patents properly brought into the district court action. ‘427 patent is the method of use patent for Neupogen ... The appellant court agrees with AMGN that the notice can only be given post approval and 180 day clock starts from there. That’s where they reversed the decision. Sandoz cannot market till 180 days post approval on March 3 2015 (which means Sep 2, 2015). Simply put, the commercialization notice cannot be given until the FDA approval of the product."

For an analyst ratings summary and ratings history on Abbvie click here. For more ratings news on Abbvie click here.

Shares of Abbvie closed at $70.80 yesterday.

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