Recently,
Regeneron Pharmaceuticals, Inc.
(
REGN">REGN
) reached a non-exclusive license and partial settlement agreement
withGenentech , Inc. {a wholly owned subsidiary of
Roche
(
RHHBY">RHHBY
)} regarding the sales of the former's injectable eye drugEylea
(aflibercept orVEGF trap) in the US.
Following the agreement,Regeneron was granted a non-exclusive
license to certain patents pertaining toVEGF receptor proteins
(theDavis-Smyth patents) in addition to other technology
patents.
Per the clauses of the deal,Regeneron has to make payments to
Roche until May 7, 2016 (the date of expiry of theDavis-Smyth
patents) based on US sales ofEylea .Regeneron will have to shell
out $60 million as soon as the cumulative US sales of the eye-drug
touch $400 million. Between $400 million - $3 billion the royalty
rate is 4.75%. If sales cross the $3 billion mark, the royalty rate
becomes 5.5%.
Following the development, the dispute in the US regardingEylea
(only foropthalmic use) has been resolved. The agreement does not
cover any other uses or non-US patents. Dispute between the two
companies regarding matters not encompassed by the deal remain
unresolved.Regeneron further stated that the fact that it has
reached an agreement does not mean that the company has infringed
theDavis-Smyth patents.
We remind investors that the US Food and Drug Administration
("FDA") clearedEylea in November 2011 for treating patients
suffering from theneovascular form of age-related macular
degeneration (wet AMD). The approval was based on positive 52-week
results from two studies, VIEW 1 and VIEW 2 which evaluated the
studies evaluated the efficacy ofEylea versus Roche/
Novartis
' (
NVS">NVS
)Lucentis (ranibizumab ), ananti-angiogenic agent approved for
treating wet AMD.
Apart from wet AMD,Eylea is also being studied for other
eye-disorders such as central retinal vein occlusion, diabetic
macular edema and myopicchoroidal neovascularization .
Our Recommendation
Currently, we have a Neutral stance onRegeneron in the long run.
The company carries aZacks #3 Rank (Hold rating) in the short
run.
NOVARTIS AG-ADR (
NVS
): Free Stock Analysis Report
REGENERON PHARM (
REGN
): Free Stock Analysis Report
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