Hikma Pharmaceuticals PLC (LON:HIK) shares were looking healthier on Friday after a US court ruled in its favour over a generic version of a medicine that currently generates well over US$1bn of sales a year.
A Federal Circuit judge upheld a ruling earlier this year in the US Court for the District of Nevada that Hikma’s generic version of Vascepa does not infringe any claim of six key patents owned by its the drug’s developer, Amarin Corporation (NASDAQ:AMRN).
Vascepa is a high-grade fish oil for the reduction of cardiovascular risk in patients with elevated triglyceride blood levels, with both Hikma and Dr. Reddy’s Laboratories looking to launch generic versions.
The courts moved with “unprecedented swiftness”, analysts at Citigroup said, with a rule having been expected at the end of this year or early next.
At Barclays the news contributed to analysts upgrading their recommendation to ‘overweight’ from ‘equal-weight’ and new share price target of 28,000p, also based on Hikma’s “impressive” first-half performance and management’s uplifted full-year guidance.
The Barclays analysts said they are now adding generic Vascepa to their forecast model, which is expected to be “significantly accretive to both 2020 and 2021” and with the potential for the product “to have a longer tail” given the relatively few number of other generic filers.
“Furthermore, underlying trends in Injectables also remain intact such that we modestly increase our numbers for that segment as well.”
Hikma is likely to launch its Vascepa version in the fourth quarter, Citi analysts said, “to allow raw materials to be processed into finished goods”.
“Hikma has secured a stable API source and FDA approval, though will not comment on its capacity to supply.”
Broker Peel Hunt said the more important pipeline event for 2020 is the pending decision on generic Advair, which is due before the end of the year, “though we cannot exclude the possibility of a delay due to the current coronavirus-driven disruption”.
The shares were up 4% to 2,505p by late morning on Friday.