Sell-Off in VIVUS (VVUS) Over Qsymia Patent Concerns is Overdone - Analyst
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Price: $0.47 --0%
Rating Summary:
3 Buy, 6 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
3 Buy, 6 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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VIVUS (Nasdaq: VVUS) shares are surprisingly lower Monday morning amid bullish comments on its obesity pill Qsymia by analysts from JPMorgan. The firm rates VIVUS Overweight with a price target of $38.
According to JPMorgan, recent concerns over Qsymia have been "blown out of proportion," triggering too much of a sell-off in the stock. One of the hot buttons has been Qsymia's intellectual property (IP) given that it is a combo of two, FDA approved, generically available drugs in topiramate and phentermine. JPMorgan said: "The company does have 4 issued patents with another 5 that are pending (filed from 2008-2011). Most of the controversy, however, has centered on 2 patents that it doesn’t own: Shank (US Patent 6,071,537) and McElroy (US Patent 6,323,236)."
Johnson & Johnson's (NYSE: JNJ) Shank's patent for using topiramate as nonotherapy for obesity expires in 2017. JPMorgan spoke with patent attorneys, which said there are a number of flaw in the topiramate patent, including no discussion of using topiramate in combination with other drugs, including phentermine. J&J would need ot provide evidencen of irreparable harm in order to seek an injunction. Given that J&J abandoned topriamate development in obesity, it would be a tough case to make.
JPMorgan also noted: "The McElroy patent (Univ of Cincinnati) covers the “use of sulfamate derivatives for treating impulse control disorders.""
Further, patent lawyers to JPMorgan that Qsymia would have exclusivity for 3.5 years, commenting: "This potential period of exclusivity is important regarding the timing of generic filers (which everyone already seems to realize/assume are coming). As generics would not want to risk losing their possible 180 day exclusivity period (in the event they somehow were to secure a rapid summary judgment), this lawyer doesn’t expect ANDA filings until 4Q of this year and notice of a Hatch-Waxman lawsuit from VVUS 4-5 months later (2-3 months for FDA to review ANDA and decide that there are no technical deficiencies, 20 days for generic co to send a copy of the paragraph 4 certification to VVUS, and then a 45 day window for VVUS to file suit subsequently triggering the 30 month stay)."
Shares of VIVUS are about 1.3 percent lower in early trading.
According to JPMorgan, recent concerns over Qsymia have been "blown out of proportion," triggering too much of a sell-off in the stock. One of the hot buttons has been Qsymia's intellectual property (IP) given that it is a combo of two, FDA approved, generically available drugs in topiramate and phentermine. JPMorgan said: "The company does have 4 issued patents with another 5 that are pending (filed from 2008-2011). Most of the controversy, however, has centered on 2 patents that it doesn’t own: Shank (US Patent 6,071,537) and McElroy (US Patent 6,323,236)."
Johnson & Johnson's (NYSE: JNJ) Shank's patent for using topiramate as nonotherapy for obesity expires in 2017. JPMorgan spoke with patent attorneys, which said there are a number of flaw in the topiramate patent, including no discussion of using topiramate in combination with other drugs, including phentermine. J&J would need ot provide evidencen of irreparable harm in order to seek an injunction. Given that J&J abandoned topriamate development in obesity, it would be a tough case to make.
JPMorgan also noted: "The McElroy patent (Univ of Cincinnati) covers the “use of sulfamate derivatives for treating impulse control disorders.""
Further, patent lawyers to JPMorgan that Qsymia would have exclusivity for 3.5 years, commenting: "This potential period of exclusivity is important regarding the timing of generic filers (which everyone already seems to realize/assume are coming). As generics would not want to risk losing their possible 180 day exclusivity period (in the event they somehow were to secure a rapid summary judgment), this lawyer doesn’t expect ANDA filings until 4Q of this year and notice of a Hatch-Waxman lawsuit from VVUS 4-5 months later (2-3 months for FDA to review ANDA and decide that there are no technical deficiencies, 20 days for generic co to send a copy of the paragraph 4 certification to VVUS, and then a 45 day window for VVUS to file suit subsequently triggering the 30 month stay)."
Shares of VIVUS are about 1.3 percent lower in early trading.
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