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Recent Patent Ruling A Positive For Pfizer

Recent Patent Ruling A Positive For Pfizer - Pfizer, Inc. NYSE:PFE, Johnson & Johnson NYSE:JNJ

A Federal District Court in Massachusetts recently issued a patent ruling that is "favorable" for Pfizer Inc. PFE 0.28%, according to Gregg Gilbert of Deutsche Bank.

As noted by Gilbert, the District Court ruled in favor of Pfizer and Celltrion and said that Johnson & Johnson JNJ 0.82%'s patent for Remicade, a multi-billion-dollar product, is invalid. Johnson & Johnson's patent will now lapse in 2018.

Johnson & Johnson plans on appealing the ruling, but Pfizer continues to prepare for a launch of its equivalent (biosimilar) to Remicade in 2016. The analyst expects the biosimilar to drive sales of $360 million in 2016 and $662 million in 2017, "which includes OUS Inflectra (biosimilar infliximab), Nivestim (biosimilar filgrastim) and Retacrit (biosimilar epoetin zeta), and potential new launches in the US starting in 4Q16."

Gilbert added that Remicade saw sales of $1.2 billion in the second quarter, which implies full-year sales of roughly $5 billion. The analyst suggested that under a hypothetical scenario in which Pfizer's product is the only biosimilar on the market with a 40 percent operating margin, it could contribute $0.05 per share to Pfizer's earnings per share. Even if Pfizer were to sell its product at a 30 percent discount to Remicade and command a 30 percent market share, Pfizer's potential "may be significant."

Gilbert maintains a Buy rating on Pfizer's stock with an unchanged $44 price target.

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DateFirmActionFromTo
Aug 2016JefferiesMaintainsBuy
Jul 2016JefferiesMaintainsBuy
Jun 2016JefferiesMaintainsBuy

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