Why This Humira Patent Loss Might Not Be What You Think

AbbVie Inc. (NYSE: ABBV) watched its shares slide on Wednesday following a ruling from the U.S. Patent and Trade Mark Office Trial and Appeals Board that found in favor of Coherus Biosciences Inc. (NASDAQ: CHRS). Unfortunately for AbbVie, the board ruled in favor of Coherus, which is looking to sell a lower-cost copycat of AbbVie’s blockbuster rheumatoid arthritis drug, Humira.

Considering AbbVie’s patent for Humira will expire in 2024, this ruling opens up the door for increased competition in the U.S. market. AbbVie already faces some pressure from similar versions internationally.

Keep in mind that 60% of AbbVie’s top line comes from Humira, and that this pressure could stifle revenue growth if more companies are able to challenge it.

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In a recent report Leerink commented on this situation:

To be clear, the hurdle for any biosimilar company to launch a biosimilar-Humira by 2019 is still high, and given AbbVie’s extensive patent estate extending into the 2030’s, any biosimilar challenger must be willing to undertake an at-risk launch until further patents are invalidated through the IPR process or the Federal Circuit Courts. However, removing the dosing patent opens the door for a fast-to-market approach with biosimilar formulations that do not infringe AbbVie’s 14+ formulation patents, of which Coherus has publicly disclosed development. The strategies of these challengers (and the ongoing 180-day launch notice US Supreme Court case) still have significant impact on the legitimacy of Coherus’ program, but we expect the market to price in a worst-case 2019E biosimilar launch after this ‘135 decision.

Shares of AbbVie were last seen down 2.2% at $65.34, with a consensus analyst price target of $72.24 and a 52-week trading range of $55.06 to $68.12.

Coherus was trading up over 8% at $23.90. The 52-week range is $14.00 to $31.98, and the consensus price target is $7.35.

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