Mallinckrodt tumbles after judge invalidates Inomax patents
- Mallinckrodt plc saw its stock plummet on Tuesday after a federal judge refuted patents that safeguarded one of the company's key revenue drivers.
- Judge Gregory Sleet of the U.S. District Court for the District of Delaware ruled that Praxair Inc., an industrial gases provider looking to market a generic version of Mallinckrodt's Inomax, didn't infringe on six patents for the branded drug. What's more, Sleet invalidated another five Inomax patents, including those related to the product's administration and distribution
- Though Inomax retains regulatory exclusivity until Oct. 9, 2018, Mallinckrodt intends to appeal this latest ruling and believes it has a "solid basis" to do so, according to a Sept. 5 statement from the company.
Inomax (nitric oxide) is a vasodilator that first gained Food and Drug Administration approval back in 1999 as a therapy for improving oxygen levels of term or near-term newborns with hypoxic respiratory failure associated with evidenced pulmonary hypertension, in conjunction with ventilatory support and other appropriate agents.
Since its approval, Inomax has been a large source of revenue for Mallinckrodt. In the second quarter alone, the drug accounted for $125.5 million, or 15% of the company's net sales. The only Mallinckrodt product with higher net sales is Acthar Gel (repository corticotropin injection), a treatment indicated for multiple sclerosis that has ruffled federal regulators for its sky-high list price.
Given the important role Inomax plays for Mallinckrodt's bottom lines, it comes as no surprise that the drugmaker has enlisted a strong series of patents to defend against generic competition entering the market. In fact, the various patents protecting the drug were set to last until February 2034, and even later when considering pediatric exclusivity, according to Mallinckrodt's most recent 10-Q filing with the Securities and Exchange Commission.
In that filing, Mallinckrodt detailed filing a trio of lawsuits against Praxair and its copycat version of Inomax between early 2015 and the fall of 2016. The suits related to a total of five patents, four of which were recently added to the FDA's Orange Book.
"An adverse outcome in the Praxair litigation ultimately could result in the launch of a generic version of Inomax before the expiration of the last of the listed patents ... which could adversely affect the company's ability to successfully maximize the value of Inomax and have an adverse effect on its financial condition, results of operations and cash flows," Mallinckrodt warned at the time.
Now, those fears may come to fruition unless the company's appeal pans out. But investors didn't seem to optimistic about such an outcome on Tuesday, when Mallinckrodt shares fell more than 12% to trade at $36.12 apiece.
"We are aware of and disappointed in Judge Sleet's ruling today in Mallinckrodt's case against Praxair for patent infringement, particularly in light of the fact that Inomax is used for treatment of hypoxic respiratory failure in fragile neonates," Mallinckrodt said in a Sept. 5 statement.
Praxair stock, conversely, barely fluctuated on news of the positive judge ruling. Shares traded at $130.30 apiece by close of market Tuesday, down less than 1%.
- Mallinckrodt plc Statement
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