Posts Tagged: "exclusivity"

Merck and Pfizer Downgrades on Patent Cliff Concerns Signal Importance of Patents to Pharma

Last month, business news outlets were reporting that stock prices for pharmaceutical firms Pfizer and Merck took a tumble after financial analysts downgraded the performance of both firms over concerns about impending patent cliffs or exclusivity issues – although more recent reports paint a mostly promising picture for the companies, thanks to upcoming acquisitions. A pharmaceutical analyst for UBS downgraded Pfizer from buy to neutral, citing the loss of patent protection in the 2025 to 2029 timeframe for several drugs which contributed 30 percent of Pfizer’s total revenue in 2015. For Merck, although patent expiry wasn’t cited in a note from a pharmaceutical analyst from BMO, that analyst dropped Merck’s rating from outperform to market perform based on the expectation that the company’s blockbuster cancer drug Keytruda would face increased competition in the immuno-oncology field during 2019. As of January 30, stock prices for both firms were down by at least a dollar per share from their closing price on January 23. The downgrades for both firms are further proof of the importance of maintaining exclusivity through patent protection to pharmaceutical firms.

Freedom to Operate and the Interplay of Patent and Regulatory Exclusivity for Life Sciences

While part one of this two-part series on intellectual property (IP) due diligence focused on a life science company’s own IP portfolio, part two will address a company’s understanding of how it fits into the market by considering its freedom to operate, as well as its competitors’, and the interplay of patent and regulatory exclusivity as it relates to the company’s product. Patent and regulatory exclusivity—two areas that can provide the most value and protection to a life science product—are very interrelated. Simply identifying when a key patent naturally expires is not sufficient, because regulatory exclusivity could possibly extend the company’s ability to keep competitors off the market or allow competitors to speed up entry in certain situations.