Exelixis, Inc. EXEL announced that the District Court of Delaware has ruled in its favor in the second patent litigation against MSN Laboratories.

MSN is seeking approval for its generic product of Exelixis’ cabozantinib.

Details of EXEL’s Patent Litigation

Cabozantinib is marketed under the brand name Cabometyx for the treatment of renal cell carcinoma (RCC).

EXEL has been involved in a lawsuit with MSN since 2019, when the latter submitted an abbreviated new drug application (ANDA) to the FDA requesting approval to market a generic version of Cabometyx tablets.

The Delaware District Court ruled in Exelixis’ favor, rejecting MSN’s challenge to three Orange Book-listed patents related to cabozantinib, including U.S. Patents No. 11,091,439 (crystalline salt), 11,091,440 (pharmaceutical compositions), and 11,098,015 (methods of treatment).

This favorable decision followed an earlier stipulation entered on June 21, 2022, which stated that MSN’s proposed generic cabozantinib product infringes the ’439, ’440, and ’015 patents, set to expire on Jan. 15, 2030.

The court also ruled that Exelixis’ pharmaceutical composition patent (U.S. 11,298,349) is not invalid or infringed by MSN’s proposed ANDA product.

MSN is seeking approval for a product containing a different polymorphic form of cabozantinib (l)-malate than the form included in Cabometyx.

Exelixis added that the FDA has not yet granted tentative approval for the potential product.

If the FDA ultimately approves MSN’s ANDA, the earliest that it may be permitted to commercially launch its proposed generic product in the United States is January 2030, subject to any appeal or additional regulatory exclusivity.

Exelixis was up 8.61% on Oct. 15 on the favorable court ruling as it defers the entry of a potential generic of its lead drug by MSN till 2030.

Shares of Exelixis have risen 18.8% year to date against the industry’s decline of 1.7%.

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EXEL’s Efforts to Ward off Generics for Cabometyx

Earlier this year, Exelixis entered into a settlement agreement with Cipla. This agreement resolved two patent litigations brought by Exelixis in response to Cipla’s ANDA seeking approval to market generic versions of Cabometyx tablets prior to the expiration of the applicable patents.

Per the terms of the agreement, Exelixis granted Cipla a license to market generic versions of Cabometyx in the United States beginning Jan. 1, 2031, if approved by the FDA.

In July 2023, Exelixis also entered into a settlement and license agreement with Teva TEVA to end the litigations related to the latter’s ANDA for Cabometyx.

Per the terms of the agreement, Exelixis will grant Teva a license to market its generic version of Cabometyx in the United States beginning Jan. 1, 2031, if approved by the FDA.

Cabometyx is Exelixis’ lead drug and a potential entry of generics may adversely impact its drug sales.

Cabometyx, one of the top drugs for RCC, has performed well. This is mainly due to its use in combination with Bristol Myers’ BMY Opdivo in the first-line setting. The drug is also approved for hepatocellular carcinoma.

BMY’s Opdivo is one of the leading immuno-oncology drugs, approved for various oncology indications.

Management is also focused on the label expansion of Cabometyx. The FDA accepted EXEL’s supplemental new drug application for cabozantinib for patients with previously treated advanced pancreatic neuroendocrine tumors (pNET) and those with previously treated advanced extra-pancreatic NET (epNET). The FDA assigned a standard review with a target action date of Apr. 3, 2025. The FDA also granted the orphan drug designation to cabozantinib for the treatment of pNET.

A potential label expansion should further propel its growth prospects.

Zacks Rank & Stock to Consider

EXEL currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the biotech sector is Alnylam Pharmaceuticals ALNY, which carries a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ALNY’s loss per share estimate for 2024 has narrowed from $1.20 to 63 cents in the past 60 days and the same for 2025 has narrowed from 34 cents to 26 cents. ALNY’s shares have rallied 50.2% year to date.

 

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