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Upate 4:45pm: Provides closing share value, analyst remark.)
Exelixis (NASDAQ:EXEL) fell 8.8% as the primary day of a scheduled three-day patent trial over its Cabometyx drug began in Delaware.
Exelixis (EXEL) is battling with generic drug maker MSN Laboratories in court docket as the corporate tries to promote generic variations of Cabometyx.
Exelixis (EXEL) might potentialy transfer +125% in a constructive ruling for the corporate the place the patent expiration is pushed out or it might see a 35% decline in its share value if MSN can begin to promote generic Cabometyx sooner, Guggenheim analyst Michael Schmidt wrote in a Oct. 11 word.
In January Exelixis (EXEL) had a blended ruling in its Cabometyx patent trial versus MSN Laboratories. The choose within the patent case dominated that the 776 patent, which fits to October 2030, wasn’t infringed, a defeat for Exelixis. On the 473 patent, the choose dominated that the patent was legitimate. The 473 patent is legitimate till August 2026.
The “prior bench trial consequence of MSN-I suggests the bar for invalidity points within the MSN-II stays excessive, in our view,” Guggenheim’s Schmidt, who has a purchase score and $30 value goal on Exilixis (EXEL) wrote. “We expect EXEL is more likely to prevail on validity of not less than one polymorph patent (‘439 and/or ‘440) that protects Cabo from generic entry till 2030.”
A possible settlement with MSN on a generic launch date, just like the current July settlement with Teva (TEVA) someday between August 2026 and February 2032 stays an lively risk within the coming days/weeks, in response to Guggenheim’s Schmidt.
In essentially the most bearish state of affairs, Exelixis (EXEL) might see generic entry for Cabo in late 2026, which might worth EXEL shares at $14/share, representing 27% draw back, in response to Guggenheim. In one of the best case state of affairs, Cabo might even see generic entry in early 2031, which might argue for a $50/share worth for EXEL, or 160% upside from Monday’s closing value.