Replies to post #198516 on Biotech Values

[DewDiligence]

Re: CELG-AGN settlement for generic Revilimid in US

The settlement terms are unusual insofar as there’s a sliding volume constraint on the generic counterparty—Natco and AGN:

http://finance.yahoo.com/news/celgene-settles-revlimid-patent-litigation-213100383.html

In settlement of all outstanding claims in the litigation, Celgene will permit entry of generic lenalidomide before the April 2027 expiration of Celgene’s last-to-expire patent listed in the Orange Book for REVLIMID.

Celgene has agreed to provide Natco [i.e. AGN] with a license to Celgene’s patents required to manufacture and sell an unlimited quantity of generic lenalidomide in the United States beginning on January 31, 2026.

In addition, Natco [AGN] will receive a volume-limited license to sell generic lenalidomide in the United States commencing in March 2022. The volume limit is expected to be a mid-single-digit percentage of the total lenalidomide capsules dispensed in the United States during the first full year of entry. The volume limitation is expected to increase gradually each 12 months until March of 2025, and is not expected to exceed one-third of the total lenalidomide capsules dispensed in the U.S. in the final year of the volume-limited license under this agreement.

Natco’s ability to market lenalidomide in the U.S. will be contingent on its obtaining approval of an Abbreviated New Drug Application.

Note: Although AGN is selling most of its generic-drug business to TEVA (#msg-115711156), AGN excluded generic Revimid from the TEVA carve-out in order to retain the upside for itself.