Judge refuses to block generic blood thinner, Momenta Pharmaceuticals set to rise Print E-mail
By Patrick Crutcher   
Thursday, 26 August 2010 01:21

U.S. District Judge Emmet Sullivan has refused to issue a preliminary injunction after a request by Sanofi-Aventis (NASDAQ:SNY) to block Momenta (NASDAQ:MNTA) and Sandoz (unit of NASDAQ:NVS) generic version of its Lovenox drug. 

Last year, SNY's Lovenox had worldwide sales of $4B, 60% in the United States. This is also the first approval of a generic drug of such a complex nature. As we reported yesterday, this could be the beginning of clearance of other generics that involve complex compounds.

The FDA’s reasoning for approval can be found at:
http://www.fda.gov/Drugs/DrugSafety/PostmarketDrugSafetyInformationforPatientsandProviders/ucm220023.htm

The debate over a generic version of Lovenox began in 2003, with a citizen’s petition for withholding approval of any ANDA for generic Lovenox. SNY’s main argument in their initial citizen’s petition in 2004 was that “until enoxaparin has been fully characterized, the FDA should not approve any ANDA citing Lovenox as the reference listed drug (RLD) unless the manufacturing process used to create the generic drug product is determined to be equivalent to Aventis's manufacturing process for enoxaparin or the application is supported by proof of equivalent safety and effectiveness demonstrated through clinical trials.”

In court, Sanofi argued that the FDA: “(1) exceeded its authority under 21 U.S.C. § 355(j)(2)(A) by requiring Sandoz to submit additional studies “to demonstrate safety and effectiveness” beyond what is permitted for ANDAs; (2) departed from agency precedent by approving a generic version of a drug derived from a complex biological starting material that has not yet been fully characterized; and (3) approved generic enoxaparin without sufficient evidence that it has the “same” active ingredient as Lovenox, as required by § 355(j)(2)(A).”

The judge countered all of these arguments and sided with the FDA on each point. Specifically, he agreed with that the FDA had the power to request data in order to ensure “Sandoz’s manufacturing process would not produce impurities with potential immunogenic effects to any greater degree than Lovenox itself.” He countered their 2nd argument with “given the deferential standard of review that this Court must accord the FDA’s scientific determinations”, simply amounting to the fact that the FDA had acted within past precedent. Lastly, he found that “In sum, just because the FDA – after seven years of careful consideration of Sanofi’s citizen petition and five years of examination of Sandoz’s ANDA – reached a conclusion at odds with the position advanced by Sanofi, does not mean that the FDA’s decision was arbitrary and capricious.”; he found that they had “‘examine[d] the relevant data and articulate[d] a satisfactory explanation for its decision.’” Additionally he found SNY’s claims of irreparable harm to be a wash , since “whatever sales Sanofi will lose to Sandoz in the absence of an injunction, Sandoz will lose to Sanofi in the presence of one” and that “Sanofi has failed to establish that the public interest favors interim injunctive relief.” This is all great news for MNTA and Sandoz(of NVS).

Investors should note that this should represent a good trading opportunity. Shorts piled onto MNTA in the weeks following SNY’s appeal. As of 8/13/2010, there are  5.37M shares short, which represents roughly 15% of the float. In after-hours, traders had only approximately 20 minutes to cover but only 45K shares were traded. Thursday's session is shaping up to be a bright green day for MNTA.

We encourage readers to investigate MNTA further as they have a very attractive pipeline with more news coming in 2010 and early 2011.

Consider this, “Sandoz is expecting sales in the range of over $40 million in the next six weeks alone for its generic enoxaparin”. That is some serious revenue for MNTA and that’s only 6 weeks away.

A copy of the court’s decision can be found at:

https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2010cv1255-27

The FDA’s response to SNY’s petition can be found at:

http://www.fda.gov/downloads/Drugs/DrugSafety/PostmarketDrugSafetyInformationforPatientsandProviders/UCM220083.pdf?opattr=FDA_s_Response_to_the_Citizens_Petition_on_Lovenox

Disclosure: No positions




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