The Medicines Company’s (MDCO) efforts to extend the patent life of its lead product Angiomax continue to progress on a positive note. The company recently announced that the US Government has not filed an appeal against the Aug 3, 2010 decision issued in favor of The Medicines Company by the US District Court for the Eastern District of Virginia.

 

In its Aug 3 ruling, the court had ordered the US Patent and Trademark Office (PTO) to treat the company’s patent term extension application for Angiomax as having been filed on a timely basis. The order was passed related to a lawsuit filed by The Medicines Company against the PTO, the US Food and Drug Administration (FDA) and the US Department of Health and Human Services.

 

The Medicines Company had filed for Hatch-Waxman exclusivity way back in 2001. However, the patent extension request was filed a day late due to confusion related to the approval date for Angiomax. Since then, The Medicines Company had been petitioning the PTO to accept the late filing which was due to “unintentional circumstances.”

 

Following the Aug 3 court ruling, the PTO granted a one-year interim extension to the principal US patent that covers Angiomax. The extension will provide exclusivity until August 13, 2011. The company also has an additional six month period of pediatric market exclusivity on Angiomax.

 

Our Take

 

We currently have a Zacks #2 Rank on The Medicines Company, which translates into a short-tem Buy rating. The favorable Aug 3 court ruling has removed a significant overhang from the stock. Moreover, the Government’s decision to not file an appeal against the court’s ruling is good news for the company. With Angiomax accounting for almost 95% of total sales in 2009, the entry of generic competition would have been devastating for The Medicines Company.

 

Longer term, we remain Neutral on the stock. Although we are pleased to see the company entering into in-licensing deals and acquisitions, we note that most of its pipeline candidates are still several years away from commercialization. Moreover, we are disappointed with the slow ramp of Cleviprex.

 
MEDICINES CO (MDCO): Free Stock Analysis Report
 
Zacks Investment Research