Favorable Patent Ruling to Boost Eagle Pharmaceuticals Inc (NASDAQ:EGRX) Stock?

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Eagle Pharmaceuticals Inc (NASDAQ:EGRX) shares were up 27.80% to $53.00 on Friday after the company got wind of a favorable court ruling for its Treanda drug patent. A patent challenge was launched by competitors against this drug that could potentially wiped off significant market share from Eagle Pharmaceuticals.

The court ruling validated Treanda’s patents, giving patent protection all the way up to 2026. This drug is used to treat people with chronic lymphocytic leukemia and indolent B-cell non-Hodgkin lymphoma, which should enjoy strong demand from patients transitioning from the reformulated version (Bendeka) to Treanda. However, investors are still wary if the two products are clinically differentiated enough to retain majority of the market share.

In February last year, Teva Pharmaceutical Industries and Eagle Pharmaceuticals entered into an exclusive license agreement for Bendeka, which had the former paying $30 million up front and an additional $90 million in milestone payments plus royalties on sales to lock up the drug. Bendeka is a rapid-acting reformulation of Treanda.

This favorable patent ruling could mean an aggressive rise in Eagle Pharmaceuticals revenue, especially since Treanda brought in $741 million last year. Analysts are projecting that this could bring the company’s EPS up to $5.69 in 2017 from an estimated $4.56 this year.

Eagle Pharmaceuticals is a specialty pharmaceutical company that focuses on developing and commercializing injectable products in the critical care and oncology areas. Apart from Treanda, it has a diverse portfolio of approved products, along with four product candidates in advanced stages of development or under review by the US FDA.

Teva Pharmaceutical Industries is a global pharmaceutical company that delivers high-quality patient-centric healthcare solutions and is based in Israel. It is the world’s largest generic medicine producer and is also a world leader in specialty medicines. Their ongoing partnership with Eagle Pharmaceuticals could continue to contribute strong revenues for both companies in the next few years.

 

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