Low Odds Court Ruling Against Regeneron Get Reversed On Appeal

Following the district court ruling in favor of Amgen, Inc. (NASDAQ: AMGN), Jefferies said in a note on Thursday that the odds of an appeal by Regeneron Pharmaceuticals Inc (NASDAQ: REGN) and Sanofi SA (ADR) (NYSE: SNY) were low.

Analyst Biren Amin noted that the District Court of Delaware ruled in favor of Amgen on the permanent injunction against the Sanofi/Regeneron combine's Praluent. The analyst noted that the public interest argument did not cut much ice, as other factors favoring Amgen could not be overcome.

Public Interest Argument May Not Hold

While noting that Sanofi and Regeneron would appeal (which they did), Jefferies was not positive of them getting the appeal reversed, given that there is a precedence that the Appeals Court doesn't favor public interest arguments.

The firm noted that in a WBIP Vs. Kohler appeal case involving low-emission houseboat generators, the Appeals Court vacated the judgement of the District Court denying WBIP a permanent injunction, reasoning that public interest argument alone was not sufficient to deny a permanent injunction for a life saving good.

Making Sense Of Ruling

Jefferies said the ruling meant Sanofi and Regeneron must halt sales of Praluent and may have to pay damages to Amgen. Consequently, the firm removed all value from Praluent starting in 2018. According to the firm, the emergency stay filed by Sanofi and Regeneron could delay Praluent's removal from the market by a year.

Jefferies has a Hold rating on the shares of Regeneron, while it lowered its price target to $349 from $394.

At Time Of Writing

• Amgen was rallying 3.29 percent to $158.02.
• Regeneron shares were tumbling 6.86 percent to $354.77.
• Sanofi shares were down 3.07 percent at $40.22.