AMGN Stock Jumped 8% Yesterday, Amgen Beats Novartis in Patent Battle

Amgen Inc (NASDAQ: AMGN) stock is experiencing a new leap following a United States Court of Appeal ruling in favor of the company on Wednesday. Back in 2019, the U.S. District Court for the District of New Jersey ruled in favor of the biotech company upholding its patent for Enbrel which Sandoz, a division of Novartis AG (SWX: NOVN) has been accused of duplicating.

Following the ruling, investors have reacted positively spurring Amgen stock to rise by $19.26 (+8.17%) to close at $255.12. This new leap is close to Amgen’s 52-week high of $256.23. At the pre-market, at the time of writing, Amgen stock price is $253 (-0.83%). It is expected that the ruling will drive more massive upturns for the company as any plans to launch the biosimilar version of Amgen’s Enbrel with the trade name Erelzi by Sandoz will be halted. This can drive more sales of Enbrel which will impact the company’s overall outlook.

Legal Tussle

Etanercept, sold under the brand name Enbrel among others, is a biopharmaceutical that treats autoimmune diseases by interfering with tumor necrosis factor (TNF, a soluble inflammatory cytokine) by acting as a TNF inhibitor. It has U.S. F.D.A. approval to treat rheumatoid arthritis, juvenile idiopathic arthritis and psoriatic arthritis, plaque psoriasis and ankylosing spondylitis. The drug which works as a fusion protein was developed by Bruce A Beutler, and his colleagues working with the University of Texas Southwestern Medical Center at Dallas.

The drug which is a fusion protein produced by recombinant DNA was patented by the team of academic researchers in the early 1990s. Etanercept was later sold to Immunex, a biotech company that was acquired by Amgen Inc in 2002. This acquisition legally made Etanercept the property of Amgen Inc. Etanercept’s initial patent expired in 2012 and got renewed for another 16 years with the new expiration date set for 2028.

The patent tussle started when Sandoz (a division of Novartis) submitted a biologics license application (BLA) for the proposed etanercept-type product “Erelzi” in July 2016. Upon review, the United States Food and Drug Administration demonstrated the biosimilarity of Erelzi to the US-licensed Enbrel. Sandoz in 2009 tried to invalidate the patents held by Hoffman-La Roche/Immunex and exclusively licensed to Amgen but lost in federal court. Sandoz was then countersued by Amgen for patent infringements related to the methods of treating psoriasis and/or psoriatic arthritis, a case that was ruled in favor of Amgen both by the District Court of New Jersey and more recently, the Court of Appeal in a 2-1 decision.

Promise to Fight On

Dissatisfied with the Appellate Court decisions, Sandoz has issued a statement confirming it is considering the next course of action to take. “Sandoz will continue its efforts to make Erelzi available to U.S. patients with autoimmune and inflammatory diseases,” said Carol Lynch, President of Sandoz U.S. and Head of North America. “Our company respects the valid intellectual property, however, Sandoz continues to believe the patents asserted by Amgen are not valid, and that it should not be able to use them to extend the drug’s exclusivity.”

Although Sandoz got approval by the FDA in August 2016, the legal tussle has prevented the company from launching the product in the U.S. market. The company promised to continue to push to fight in order to see Erelzi get approved and fulfill its potential to help drive a more sustainable healthcare system.

With this position, Sandoz may be appealing the decision which will see the case taken down to the Supreme Court. Should this happen, the company will have to prove a case that “Biosimilars can make tremendous contributions to the sustainability of U.S. healthcare and enhance patient access to biologic medicines, which are often life-changing treatment options for patients with chronic illness,” as noted by Colin C. Edgerton, MD, a rheumatologist and Executive Chairman of the American Rheumatology Network.