Regeneron Pharmaceuticals, Inc.
) recently announced that the approval of partner
) llaris (canakinumab, ACZ885) in the EU for the acute gouty
arthritis (gout) indication has opened up an additional royalty
stream for it. The European Commission cleared the drug for
treating adults suffering from frequent attacks of acute gout.
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We remind investors that in Jun 2009, Regeneron inked a deal with
Novartis following which the former receives royalties on global
sales of Ilaris in the range of 4%-15%. Under the terms of
the deal, Regeneron is entitled to receive the maximum royalty of
15% when the global sales of the drug go past $1.5 billion.
Regeneron stated in its press release that it received royalties
of $2.8 million in 2012 from Ilaris sales.
We note that gout - a serious, chronic and progressive
inflammatory disease - is characterized by a high prevalence of
comorbidities, such as hypertension, kidney ailment, diabetes,
dyslipidemia and cardiovascular disorder. Patients experience
attacks of gout when the body has a strong inflammatory response
to the uric acid crystals forming in the affected joint.
Moreover, the symptoms of such attacks cannot or should not be
managed with existing therapies.
The approval of Ilaris makes it the first biologic to be cleared
in the EU for symptomatic pain relief in a gouty arthritis
indication. The drug has to be administered to the gout patients
through a single, subcutaneous 150 mg injection.
However, Novartis has not yet tasted success with Ilaris for the
gout indication in the US. In Aug 2011, the US Food and Drug
Administration (FDA) issued a complete response letter (CRL) to
the company refusing to approve Ilaris for gout on the basis of
the available data. The US regulatory body asked for additional
data while issuing the CRL. Novartis is working with the FDA to
address the issues.
Both Novartis and Regeneron carry a Zacks Rank #3 (Hold).
Favorably placed stocks in the pharma space include
Eli Lilly and Company
). Both companies carry a Zacks Rank #2 (Buy).