Biotech Values

[Biopharm investor]

Dew, re: Lexapro

"I’ll be surprised if they chance an “at risk” launch where the potential penalties are so large."

I tend to agree, at least partially. I doubt Teva would launch prior to a lower court decision since doing so could subject Teva to treble damages on a $2 billion per year product should the lower court rule that Forest's patent is valid.

However, from Forest's Legal Proceedings discussion in its 10K, it's evident that Teva, through its subsidiary Ivax, has FTF status. With a final FDA approval in hand, a lower court ruling could come any day, and if it favors the invalidity claim, Teva could launch at will and enjoy the 180-day exclusivity on this $2B/year product. Even though Forest would surely appeal the decision if it loses and as such Teva would still be "at risk" with respect to the possibility that the appelate court could overturn the lower court ruling, the Company would not be subject to treble damages at that point. That may be a risk they would take.

I don't think any analyst has the sales and earnings for an exclusive Lexapro launch in their models, so this is sort of a wild card that offers the possibility of a positive surprise with no real downside.