Allergan Shares Rise on Novel Patent Pact for Restasis
Shares of Allergan plc (AGN) - Get Report ended Friday, Sept. 8, at $233.55, up 2.6%, after the drugmaker unveiled an agreement that transfers patents for Restasis, Allergan's longstanding dry eye medication, to the Saint Regis Mohawk Tribe.
The Tribe now owns the patents that are listed in the U.S. Food and Drug Administration's Orange Book and are set to expire on Aug. 27, 2024. Allergan has secured exclusive licenses in the patents tied to the product.
A sovereign tribal government, the Tribe will file a motion to dismiss the ongoing inter partes review (IPR) of the Restasis patents based on their sovereign immunity from IPR challenges.
"[W]e believe this removes a headwind against AGN," wrote Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS charitable trust portfolio, which owns Allergan.
"With some operational negativity no longer a factor in the shorts' thesis against the stock, we hope sentiment shifts back toward the great opportunities AGN's business has in capturing share with growing demand for medical aesthetics," Cramer added. "We believe this opportunity coupled with the potential of the company's 'six stars' pipeline will provide long-term growth."
In a statement on Friday, Allergan chief legal officer Bob Bailey said the Saint Regis Mohawk Tribe and its counsel "approached Allergan with a sophisticated opportunity to strengthen the defense of our RESTASIS intellectual property in the upcoming inter partes review proceedings before the Patent Trial and Appeal Board," adding that Allergan "evaluated this approach closely, with expert counsel in patent and sovereign immunity law."
Allergan reviewed case law including Covidien LP v. University of Florida Research Foundation Inc. and Neochord, Inc. v. University of Maryland, Bailey said.
In December 2016 the U.S. Patent Office ruled that Mylan was entitled to challenge half a dozen patents tied to Allergan's Restasis franchise. A hearing on the case is scheduled for next week in Alexandria, Virginia.
In Friday's news release, the Saint Regis Mohawk Tribal Council described the deal with Allergan as a "viable and sound opportunity for the Saint Regis Mohawk Tribe to enter into the patent, technology and research sector as part of our overall economic diversification strategy," adding that the Tribe "cannot depend solely on casino revenues."
As part of the agreement, the Tribe will receive $13.75 million and will be eligible to receive $15 million in annual royalties.
The announcement noted that the agreement does not impact the pending abbreviated new drug application (ANDA) patent litigations regarding the Restasis patent family which recently wrapped up a five-day trial in federal district court in Marshall, Texas.
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