designer491/iStock via Getty Images Pacira Biosciences ( NASDAQ: PCRX ) plunged 48% after a judge ruled that a patent 495 for its best-selling drug, Exparel is invalid. The stock has been halted. US District Court Judge Madeline Cox Arleo ruled that claim 7 of the '495 patent is invalid, according to her ruling on Friday.
Generic drug maker eVenus Pharmaceuticals is trying to launch a generic version of Exparel. eVenus has said it may launch the generic version if it wins the case. “We remain steadfast in our belief in the strength and validity of our intellectual property and that eVenus is infringing upon our patents,” said Frank D.
Lee, CEO of Pacira BioSciences said in a statement on Friday. “In light of the Court’s decision, we are considering our legal options, which include pursuing an appellate review at the U.S.
Court of Appeals for the Federal Court as warranted.” The judge's decision comes after Pacira ( PCRX ) shares plunged 20% on July 2 after the U.S.
FDA approved a generic version of Exparel (bupivacaine liposome), a non-opioid used for post-surgery local anesthesia. JPMorgan said in a note last month that it sees downside for PCRX shares to $10 to $15 a share if the patent is ruled invalid, which the firm said is a "worst case" scenario. "With an invalid patent, investors may assume additional Gx players enter the marker, further eroding Exparel's opportunity," JPMorgan analyst Hardik Parikh wrote in a July 30.
"In these unfavorable scenarios, management believes it could take years to sort out (a "marathon"), and we think settlement could eventually be a reasonable outcome/likely outcome." Jefferies said in a note a month ago that if the patent is found to be invalid, Pacira ( PCRX ) may seek an injunction to block an eVenus launch, though it would be "hesitant" to buy on weakness in this scenario. Barclays noted last month that 78% of the company's revenue comes from Exparel.
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