Tue, Oct 29, 2013 - Page 14 News List

TWi shares tumble after lawsuit loss

BAD DAY AT THE OFFICE:TWi shares fell NT$37 to NT$342 on the Emerging Stock Market yesterday, and at one point they had dropped by as much as 12.9 percent

By Kevin Chen  /  Staff reporter

Shares of TWi Pharmaceuticals Inc (安成) fell 9.76 percent after the company said last week that it lost a patent infringement lawsuit against Takeda Pharmaceutical Co of Japan in the US.

The company's shares fell also because some investors took the opportunity to cash in recent gains in the stock.

While the Taiwanese firm said it would appeal, analysts said risks associated with the litigation outcome and other implications would rise accordingly.

On Friday, the company confirmed that the US District Court for the Northern District of California ruled in favor of Takeda’s claims that TWi had infringed on the Japanese firm’s patent No. 7,737,282 concerning an amorphous form of the dexlansopraozle delayed-release capsules, or the generic version of Takeda’s Dexilant.

Dexilant is used to treat heartburn associated with gastroesophageal reflux disease (GERD) and also erosive esophagitis (EE). TWi is seeking to launch a generic version of Dexilant prior to the patents’ expirations, with the latest ending on Sept. 17, 2030.

Citigroup Global Markets estimated that generic Dexilantis, once launched by TWi in 2015, could generate US$25 million revenue to account for 21 percent of the company’s total revenue. The company reported NT$355 million (US$12.1 million) in sales last year.

According to data compiled by researcher IMS Health Inc, the total annual sales of Dexilant in the US were about US$771 million last year.

In April 2011, Takeda initiated the lawsuit against the TWi regarding six patents registered in the US after the latter filed an abbreviated new drug application (ANDA) with a Paragraph IV certification for its generic version of Dexilant in November 2010.

TWi said it had previously prevailed on the other five patents.

“TWi respectfully disagrees with the Court’s decision on the ‘282 patent and intends to appeal the decision,” the company said in a statement on its Web site.

However, First Capital Management Inc (第一金證券投顧) said the company’s move to bring the case to the US Court of Appeals for the Federal Circuit meant it would take six quarters to know the outcome, while Citigroup said risk associated with an unfavorable litigation outcome or a delayed launch of the product has increased, according to their separate client notes yesterday.

TWi shares fell NT$37 to NT$342 on the Emerging Stock Market yesterday. At one point, they lost as much as 12.9 percent, according to the over-the-counter market statistics. So far this year, the shares have surged by nearly 155 percent.

TWi focuses on developing specialty generic prescription drugs for the US market and it has filed nine ANDAs with the US Food and Drug Administration, with plans to launch the drugs in the next three to four years.

The company’s most significant Paragraph IV opportunities are generic versions of Dexilant, Lidoderm (for the relief of pain associated with post-herpetic neuralgia) and Megace ES (used to treat anorexia or wasting of AIDS patients).

TWi has inked US marketing agreements with partners including Teva Pharmaceutical, Par Pharmaceutical and Boca Pharmacal on six drugs on its ANDA pipeline.

First Capital said the company would remain in the red this year, for a net loss of NT$5.5 per share, but forecast a turn around following launches of several generic products over the next few years.

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