Trial Impact & Summary:
OK, I listened to the conference call and I also asked some questions. Here is my take on the situation & where INSM stands.
Results:
They jury found INSM violated the ‘287, ‘414, & ‘151 patents.
The $7.5M is the penalty and 15% <$100MM sales and 20%>MM sales royalties are for PRIOR sales only.
Any IPLEX sales (short stature, HARS, etc) that are approved or will be approved under current ‘141 patent infringements would be subject to the future royalties determined by the judge.
The future royalties are not determined yet and will be determined by the judge & subject to the appeal process.
INSM doesn’t have to pay any money to TRCA until the appeal process is complete.
Impacts & INSM options:
The 287 & 151 expire in 2010. The ‘414 expires in 2018.
The 287 and 151 will only be fought by the appeal process only. To change any development methodologies & get subsequent approval by the FDA would be a waste of time and money. The appeal process takes ~12-24 months. We are going into CY ‘07. This puts us at a couple of years max with those patents if INSM loses the appeal entirely. The bang for the buck isn’t with these patents & management confirmed this.
The issue of the ‘141 patent will be fought with a two prong approach. 1) The ‘141 patent will be fought by the appeal process. 2) INSM is working on the development of other methods of expression for the IGF underdevelopment. (I hope this area gets accelerated attention).
If INSM had won this trial it would still go through the appeal process so the overhang of the litigation would still be with the pps. I agree that I would have rather had INSM won outright but it is by no means done.
The only real issue here short term issue is the question of an injunction which would impact future indications. Since those indications are several years away from FDA approval we have time to work through the appeals process and work on the expression of molecule.
Prior sales < $1MM and since the market & uptake on short stature is small & INSM doesn’t pay until the appeal process is complete, the financial implications are limited. INSM needed to do the shelf or partner (or both) to move forward with the development of the other indications for IPLEX & INSM18 so nobody should be shocked here.
Bottom line: This will restrict the pps for sometime but the real issue is the ‘141 strategy & future indications. TRCA won this battle but it is a small victory in the large scope of the war!
Comments are welcomed.
BR/
b8
