Novartis drops amid loss in patent ruling related to Entresto drug (NYSE:NVS)
Update 3:48pm: Adds Novartis comment on appeal, updates shares.
Novartis (NYSE:NVS) lost a patent ruling related to its blockbuster heart failure drug Entresto. Novartis ADRs fell 3.4%.
A court found that claims of the '659 patent to be invalid for "lack of written description," according a court filing from the U.S. District Judge Richard Andrews.
Novartis (NVS) in 2019 sued several drug makers claiming that proposed generic versions of Entresto infringed patents for its blockbuster treatment for heart failure.
Entresto represented about 11% of Novartis global sales in 2022. In Q1 2023, the drug brought in ~$1.4B. Revenue from the Swiss pharma's top 20 drugs overall in the quarter was ~$8.2B.
Novartis (NVS) said in a statement that it will appeal the court ruling on the Entresto patent.
"Currently no generic Entresto products have tentative or final FDA approval," Novartis said in a statement. "If approved, any commercial launch of a generic Entresto product prior to the final outcome of Novartis appeal, or ongoing infringement litigations involving other patents, may be at risk of later litigation developments."
Novartis (NVS) also maintained its mid-term outlook of +4% sales growth (in cc) 2022-2027 CAGR, with 40% Core OpInc margin for Novartis ex-Sandoz, according to the statement.
Bank of America analyst Graham Parry highlighted in a note after the patent ruling on Friday that Novartivs (NVS) had both won one case and lost another in the Entresto patent litigation in the past 24 hours.
Barry pointed out that Novartis (NVS) won against Mylan in West Virginia District Court over claims it infringed its 2027 crystalline patent protecting Entresto until 2027.
"Overall generic risk increased a little, in our view, but generic launch ahead of Novartis and consensus modelling of `not before 2025' still seems unlikely in our view," BofA's Parry wrote in the note. "Although the loss of the 2025 patent case increases risk of imminent generic launch, we see this as unlikely."
"Overall we see today's move as overly pricing risk," Parry added.
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Source: Seeking Alpha
