Amgen's PCSK9 patent win could push Sanofi drug off market

(Brian Turner / CC BY 2.0)

The analyst who warned that Sanofi ($SNY) and Regeneron ($REGN) could owe Amgen ($AMGN) hefty royalties on its PCSK9 drug Praluent has come back with a prediction more dire: Chardan's Gbola Amusa says it's "reasonably likely" that the potential blockbuster would be removed from the market completely.

Last week, Amgen prevailed in a patent fight with Sanofi and Regeneron, which had claimed that several of Amgen's PCSK9 patent claims were invalid. A Delaware jury backed those claims, putting Praluent on the wrong side of Amgen's patent boundaries.

Amusa has this to say about the situation post-decision: "After further consultation with our legal counsel, we believe … that it is reasonably likely that Praluent will be removed from the U.S. market in 2016," he wrote in an investor note (as quoted by Barron's).

Sanofi and Regeneron say they'll appeal, and that's a process that would take years. But in the meantime--Wednesday and Thursday, in fact--there's a hearing on Amgen's request for a permanent injunction that could kick Praluent to the sidelines. That would give a big boost to Amgen's Repatha, now competing head-to-head with Praluent.

A slate of analysts believe that Amgen's bid for an injunction will fail, but that Sanofi and Regeneron will end up striking a deal for royalties, with estimates ranging from 5% to 20% or more. At the higher end, those payments would take a hefty bite out of the PCSK9 franchise--several hundred million, if Praluent ramps up as many expect.

Amusa sees those analysts as overly optimistic. "Consensus appears to underestimate" that the court ruling might "lead to Praluent being taken off the U.S. market in 2016," he writes.

The suspense on the injunction request won't be longstanding, obviously, with the hearing coming up shortly. So, we'll have more clues to the ultimate outcome in that hard-fought dispute later this week.

Meanwhile, the two drugs will continue their battle for market share. Praluent and Repatha launched within a month of each other, and the rivalry between the two has been fierce. The two drugs have each racked up exclusive deals with some payers, though some top payers are covering both.

But sales haven't taken off yet, because patients often have to clear prior authorization hurdles to get their prescriptions covered. That's partly because the drugs both carry list prices of $14,000 or more, and partly because there's no proof yet that the drugs actually prevent heart attacks, strokes and the like--though they are immensely effective at lowering "bad" LDL cholesterol. Outcomes data are on their way, with Amgen likely to report first.

- see the Barron's blog post

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