Vanda Stock Up On Favorable U.S. Court Ruling For Fanapt

Shares of Vanda Pharmaceuticals (NASDAQ:VNDA) surged 20.6% after the U.S. District of Delaware ruled in favor of the company in a patent infringement lawsuit against Roxane Laboratories Inc., a part of West-Ward Pharmaceuticals now.

The court ruled that Roxane Laboratories has infringed U.S. Patent Nos. RE39,198 (the 198 Patent) and 8,586,610 (the 610 Patent) by submitting an Abbreviated New Drug Application (ANDA) to the FDA for a generic version of Fanapt, much before the expiration of Vanda's patents.

Since the court found both patents valid, it issued an injunction barring Roxane from marketing its product until the expiration of the '610 patent, due on Nov 2, 2027.

We remind investors that Vanda filed the lawsuit against Roxane Laboratories in Jun 2014. Fanapt is approved for the treatment of schizophrenia. The oral formulation of the drug was marketed by Novartis Pharma AG (NYSE:NVS) until Dec 31, 2014. Thereafter, Novartis has transferred the commercial rights to Fanapt in the U.S. and Canada.

Meanwhile, this May, the FDA approved Vanda’s supplemental New Drug Application (sNDA) for Fanapt, modifying and expanding the prescribed information to describe the effectiveness of the product as a maintenance treatment for schizophrenia in adults. In addition, the FDA granted three years of marketing exclusivity for the changes related to the sNDA, providing exclusivity until May 26, 2019.

In addition, the company filed six separate lawsuits at the Delaware District Court against Roxane and other companies, seeking adjudication for patent infringement by these companies of one or more claims of the ‘610 Patent and U.S. Patent No. 9,138,432. The lawsuit came on the heels of an ANDA submission to the FDA for a generic version of Fanapt prior to the expiration of both the ‘610 Patent in Nov 2027 and the ‘432 Patent in Sep 2025.

The recent favorable court ruling should provide Fanapt another 10 years of exclusivity, although the other lawsuits are yet to be settled.

Vanda currently carries a Zacks rank #2 (Buy). A couple of other favorably placed stocks in the health care sector are Actelion Ltd (OTC:ALIOF) and ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) . Both the stocks sport a Zacks Rank #1 (Strong Buy).