Sucampo-Takeda Sue Dr. Reddy's for Amitiza Patent Violation

Sucampo Pharmaceuticals, Inc. (SCMP) and partner Takeda Pharmaceutical Company Limited filed a patent infringement lawsuit in the U.S. District Court for the District of New Jersey against Dr. Reddy's Laboratories (RDY).

The lawsuit was against an Abbreviated New Drug Application (ANDA) that Dr. Reddy's had filed with the FDA pertaining to marketing, selling and using a generic version of Sucampo’s 8 mcg and 24 mcg Amitiza soft-gelatin capsule products.

The lawsuit claimed the violation of seven patents, of which the latest expires in 2027, listed in the FDA's Orange Book.

Following the receipt of a notice letter sent by Dr Reddy’s dated Oct 1, 2014 regarding the ANDA, Sucampo filed the lawsuit within the next 45 days. In the letter, Dr. Reddy’s alleged that a few U.S. patents which cover compositions, formulations and methods of using Amitiza are invalid, unenforceable and/or will not be infringed by Dr. Reddy’s manufacture, use or sale of the product described in its ANDA.

Consequently, the final approval of Dr. Reddy's ANDA will be on hold for 30 months from the date of receipt of the notice letter, as per the Hatch-Waxman Act.

We note that Sucampo presently has two marketed products – Amitiza and Rescula. Amitiza is Sucampo’s flagship product which is approved in the U.S. for the treatment of chronic idiopathic constipation (CIC.TO) in adults and opioid-induced constipation (:OIC) in adults with chronic, non-cancer pain. The drug is also approved for irritable bowel syndrome with constipation (IBS-C) in women aged 18 years and older in the U.S.

We note that Sucampo along with its partners R-Tech Ueno, Ltd. and Takeda Pharmaceutical Company Ltd. had entered into a settlement and license agreement with privately held Anchen Pharmaceuticals, Inc. and Par Pharmaceutical Companies, Inc. in Oct 2014 regarding a patent litigation related to Sucampo’s Amitiza.

Amitiza being a key product for Sucampo, the company is trying hard to prevent an earlier-than-expected entry of generics in the market.

Sucampo carries a Zacks Rank #1 (Strong Buy). Other well-placed stocks in the health care sector include ArQule, Inc. (ARQL) and Jazz Pharmaceuticals (JAZZ). Both carry a Zacks Rank #2 (Buy).

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