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On Tuesday, Morgan Stanley adjusted its price target for Exelixis (NASDAQ:EXEL), a biotechnology company, raising it to $30.00 from $28.00 while keeping an Equalweight rating on the stock. This revision follows a legal ruling in favor of Exelixis regarding its cancer drug, Cabometyx's patent protection.
The court's decision declared that the Malate Salt Patents, which are crucial for Cabometyx, are valid, thereby providing patent protection until 2030. The ruling was a result of the ANDA litigation between Exelixis and MSN Laboratories, with the judge determining that the patents numbered 11,091,439; 11,091,440; and 11,098,015 are not invalid. However, another patent, 11,298,349, was deemed not infringed.
Exelixis had previously filed a patent infringement suit against MSN, with the bench trial taking place in October 2023. MSN had agreed to the infringement of the Malate Salt Patents, but the judge found that Exelixis did not prove direct infringement for the '349 patent, as there was no evidence that GRASTAR, used in MSN's product, improved flow in the ANDA products.
Despite the mixed ruling, Morgan Stanley views the outcome favorably for Exelixis. The analyst noted that the decision secures patent protection for Cabometyx until the Orange Book's 2030 expiration date. This is slightly less than the ideal scenario, which could have extended protection until 2032, but it still offers a significant period of market exclusivity for the drug.
The company had previously reached an agreement with Teva Pharmaceuticals, which will allow Teva to market a generic version of Cabometyx starting in 2031. Morgan Stanley's raised price target reflects the anticipated growth in Cabometyx sales up until the potential introduction of generic competition in 2030.
In other recent news, Immuneering Corporation has secured orphan drug status from the FDA for its pancreatic cancer drug candidate, IMM-1-104. This follows encouraging initial Phase 2a trial results, where the drug, in combination with chemotherapy, showed positive responses in pancreatic cancer patients. Immuneering is also exploring IMM-1-104 with other chemotherapy regimens and as a standalone treatment.
Meanwhile, Teva Pharmaceutical Industries (NYSE:TEVA) Ltd has settled U.S. legal disputes amounting to $450 million, including a significant payout related to allegations of using patient assistance charities for kickbacks and engaging in price-fixing for generic drugs. Despite these settlements, Teva has not admitted any wrongdoing. On a positive note, Teva has launched its generic version of Sandostatin LAR, an acromegaly treatment with annual sales of $826 million as of July 2024. Analysts from BofA Securities have maintained their Buy rating on Teva's shares, viewing this move as a potential upside for the company's financials in 2024-25.
Teva has also reached an $80 million settlement with the city of Baltimore over opioid litigation, contributing to the city's total recoveries of $402.5 million in similar cases. Analysts from UBS have raised their price target for Teva to $26.00, maintaining a Buy rating due to the promising prospects of Teva's drug candidate duvakitug. Lastly, the company reported a significant increase in its second-quarter revenue for 2024, with an 11% growth to $4.2 billion.
InvestingPro Insights
Adding to the positive outlook for Exelixis following the favorable patent ruling, recent data from InvestingPro sheds light on Teva Pharmaceutical Industries (NYSE:TEVA), the company set to market a generic version of Cabometyx starting in 2031. Teva's stock has shown remarkable strength, with a 99.08% price total return over the past year and a 30.31% return in the last six months. This performance aligns with an InvestingPro Tip indicating that Teva is trading near its 52-week high.
Despite Teva's recent stock performance, the company faces some financial challenges. An InvestingPro Tip notes that Teva was not profitable over the last twelve months, with a negative P/E ratio of -44.51. However, analysts predict the company will be profitable this year, which could be a positive sign for its future performance and its ability to capitalize on opportunities like the Cabometyx generic.
For investors interested in a deeper analysis, InvestingPro offers 12 additional tips for Teva, providing a more comprehensive view of the company's financial health and market position.
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