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Mylan (MYL) Gets Favorable Ruling Against Sanofi's Lantus

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Mylan N.V. announced the U.S. Patent and Trademark Appeal Board (PTAB) has ruled in favor of the company in its inter partes review (IPR) proceedings against Sanofi (SNY - Free Report) for the generic version of Lantus (insulin glargine 100 Units/mL).

The board rejected all claims of Sanofi's Lantus formulation patents (U.S. Patent Nos. 7,476,652 and 7,713,930). The ruling invalidates both patents of Lantus.

We remind investors that Lantus is a long-acting insulin, which is used to treat adults with type 2 diabetes, and adults and pediatric patients with type 1 diabetes for the control of high blood sugar.

Sanofi initiated patent infringement litigation against Mylan's New Drug Application (NDA) in the United States District Court for the District of New Jersey in October 2017 that includes these two formulation patents listed as covering Lantus and other patents listed as covering the Lantus SoloSTAR injection pen. No trial date has been set for that litigation.

Meanwhile, Mylan's 505(b)(2) NDA for generic versions of Lantus and Lantus SoloSTAR is under review in the United States. The generic version is being developed in collaboration with Biocon.

The news bodes well for Mylan, given the market potential of Lantus. Sanofi's total IQVIA sales for the 12 months, ending Oct 31, 2018, were approximately $2.14 billion for Lantus 100 Units/mL and about $4.39 billion for Lantus SoloSTAR.

However, the ruling comes as a setback for Sanofi as Lantus is its key product. Lantus is facing increasing competitive pressure at the payor level and from biosimilars in several European markets and Japan. Eli Lilly and Company (LLY - Free Report) and Boehringer Ingelheim Pharmaceuticals, Inc. launched Basaglar in the United States in 2016. Basaglar is a follow-on insulin to Lantus. In December 2015, the FDA approved Basaglar as a long-acting insulin used to control high blood sugar in adults and children with type 1 diabetes, and adults with type 2 diabetes.

On the other hand, a potential approval of the generic version of Lantus should boost Mylan’s generic portfolio, which of late has been facing few challenges. Mylan’s stock has lost 29% in the year so far, compared to the industry’s decline of 14.5%.

Mylan proactively discontinued a number of products, while also transferring some to other sites. These have led to a temporary disruption in supply of certain products and reduced volumes in North America generic sales.

Zacks Rank & Key Pick

Mylan currently carries a Zacks Rank #3 (hold). A better-ranked stock in the healthcare sector is Gilead Sciences, Inc. (GILD - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates increased from $6.64 to $6.93 for 2018 over the past 60 days. Estimates for 2019 are also up by 30 cents.

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