Allergan Enjoins St. Regis Mohawk Tribe To Protect Restasis Patents

Sep. 10, 2017 4:14 AM ETAllergan plc (AGN)VTRS, PFE, SHPG, TEVA37 Comments
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  • AGN enjoined St. Regis Mohawk Tribe to protect Restasis patents.
  • It highlights how important Restasis is to AGN.
  • Investors could focus on Restasis' decline or AGN's lack of R&D prowess.
  • Growth is dead and so is AGN.

AGN CEO BRent Saunders. Source: Institutional Investor

Allergan (NYSE:AGN) shocked the market with news that it was partnering with St. Regis Mohawk Tribe to protect Restasis patents:

Allergan plc (NYSE: AGN), a leading global pharmaceutical company, and the Saint Regis Mohawk Tribe today announced that the Tribe now owns all Orange Book-listed patents for RESTASIS® (Cyclosporine Ophthalmic Emulsion) 0.05%, and that Allergan has been granted exclusive licenses in the patents related to the product. The Tribe, a recognized sovereign tribal government, is filing a motion to dismiss the ongoing inter partes review (IPR) of the RESTASIS® patents based on their sovereign immunity from IPR challenges.

The agreement does not impact current patent litigation between Allergan and generic rivals who have filed abbreviated drug applications ("ANDA") regarding Restasis. A trial on the matter was recently completed in Federal District Court in Marshall, Texas. According to Allergan it was St. Regis who approached the company about the unique structure. The tribe is to receive a $13.75 million up front payment and $15 million in annual royalties beginning in 2018. The royalties end when the Restasis patents expire or are no longer valid.

The market welcomed the news. AGN rose nearly 2.5% to $233.55. I had the following takeaways on the partnership.

Restasis Could Be More Important To Allergan Than Once Thought

The arrangement with St. Regis appears rather unique and crafty. Restasis patents are being challenged by generic rivals Mylan (MYL), Teva Pharmaceutical (TEVA), Akorn and Inno Pharma, a division of Pfizer (PFE). I understand that Restasis had exclusivity through 2014. Allergan extended patents for the drug through 2024 as generic competition approached. The argument made by generic rivals is that the patent extension was a defacto attempt to extend exclusivity.

Allergan also faces an inter partes review at the U.S. Patent and

This article was written by

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The Shock Exchange has a B.A. in economics and MBA from a top 10 business school. He has over 10 years of M&A / corporate finance experience. Currently head the New York Shock Exchange, financial literacy program based in Brooklyn, NY.His book, "Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead", predicted pain ahead for the U.S. economy and financial markets.In 2014 the law firm of Kirby, McInerney, LLP brought a class action lawsuit against Molycorp, Inc. for "materially misleading statements" in its financial statements. Kirby, McInerney used investigative journalism from the Shock Exchange to buttress its case. That's the discipline the Shock Exchange brings to every situation he covers for SA.

Disclosure: I am/we are short AGN, TEVA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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