Shares of Regeneron Pharmaceuticals were boosted by the news that the US firm has struck a deal with Roche's Genentech in a still ongoing patent dispute concerning its new eye drug Eylea.
Eylea (aflibercept), also known as VEGF Trap-Eye, was approved by the US Food and Drug Administration in November for the treatment of patients with wet age-related macular degeneration. The drug, partnered with Bayer in certain markets, will compete with Roche's Lucentis (ranibizumab) and the firms have been involved in a legal battle in New York.
However, Regeneron says it has signed a "non-exclusive licence and partial settlement agreement" with Genentech relating to US ophthalmic sales of its drug through May 2016. Specifically, the company has received a licence to patents relating to VEGF receptor proteins, known as the Davis-Smyth patents.
In return, Regeneron will make a payment of $60 million after cumulative US sales of EYLEA reach $400 million, plus royalties of 4.75% on sales between $400 million-$3 billion. If US revenues of Eylea pass $3 billion, the royalty rate will rise to 5.5%. The companies noted that litigation is continuing with respect to matters not included in the agreement.
Still, this partial settlement is being viewed favourably by analysts and Jason Kantor at RBC Capital said in an investor note that the deal "appears reasonable". He sees it as a positive step which may lead to resolution of disagreements over use of aflibercept as a treatment for colorectal cancer - the drug is being developed in that indication by Regeneron and Sanofi as Zaltrap.