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Ironwood/Allergan Settle Linzess Patent Litigation With Mylan

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Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) and its partner Allergan plc (AGN - Free Report) announced that they have settled all pending patent litigations with Mylan Pharmaceuticals, Inc. (MYL - Free Report) related to gastrointestinal drug, Linzess (linaclotide). Mylan has filed an abbreviated new drug application (“ANDA”) seeking approval to market a generic version of Linzess. However, Mylan is yet to receive approval from the FDA for any generic version of Linzess.

Per the terms of the settlement agreement, Mylan was granted license to launch the generic version of Linzess’ dosage of 145 mcg and 290 mcg in the United States beginning Feb 5, 2030. It also grants Mylan license to launch authorized generic of 72mcg dosage of Linzess beginning Aug 5, 2030.

The settlement agreement will be submitted to the U.S. Federal Trade Commission and the U.S. Department of Justice for review.

This is the third patent settlement agreement entered into by Ironwood and Allergan to protect revenues of Linzess from generic competition. In 2018, the companies made similar settlements with Sun Pharmaceuticals and Aurobindo Pharma.

We note that the settlement with Mylan has advanced the date of launch of any Linzess generic in the United States by six months. While Aurobindo Pharma has been allowed to market an authorized generic version from Aug 5, 2030, Sun Pharmaceuticals can market the same from Feb 1, 2031.

There are several other ongoing patent litigations related to Linzess generic in U.S. district courts, which include ANDAs filed by Teva and Sandoz, the generic arm of Novartis (NVS - Free Report) .

Shares of Ironwood have declined 46.5% in the past six months compared with the industry’s decrease of 15.3%.

Linzess, which is indicated for the treatment of irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (“CIC”), is the sole commercial product in Ironwood’s portfolio. The drug came up with an encouraging performance in the first nine months of 2018. Sales of the drug were $555.9 million in that period, up almost 10% year over year.

Ironwood Pharma has plans to split itself into two separate entities to achieve increased operational performance and strategic flexibility. One entity will focus on Linzess and GI pipeline development and the other entity will focus on the development of the sGC pipeline for the treatment of serious and orphan diseases. The transaction is expected to close in the first half of 2019.

Zacks Rank

Ironwood currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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