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Mallinckrodt: Patent battle over Generic Inomax

Inomax (nitric oxide) is a vasodilator that first gained Food and Drug Administration approval back in 1999 as a therapy for improving oxygen levels of term or near-term newborns with hypoxic respiratory failure associated with evidenced pulmonary hypertension, in conjunction with ventilatory support and other appropriate agents. An adverse outcome in the Praxair litigation ultimately could result in the launch of a generic version of Inomax before the expiration of the last of the listed patents … which could adversely affect the company’s ability to successfully maximize the value of Inomax and have an adverse effect on its financial condition, results of operations and cash flows.

Thursday the U.S. Court of Appeals for the Federal Circuit upheld the Patent Trial and Appeal Board’s (“PTAB”) decision to invalidate the majority of a patent for Mallinckrodt’s (MNK) respiratory drug Inomax. The U.S. Court of Appeals for the Federal Circuit affirmed a determination by the Patent Trial and Appeal Board that key claims in a patent covering a method of distributing Inomax’s active ingredient nitric oxide were invalid as obvious.

The Federal Circuit Court said all of the claims were invalid. Praxair (PX) had challenged the validity of the 8,846,112 patent; one of several Mallinckrodt is using to block a generic copy of the drug.

A Federal Circuit Court ruled the majority of a patent for MNK’s Inomax was invalid. It could pave the way for Praxair’s generic Inomax. Inomax represents over 20% of MNK’s revenue. Acthar and Inomax are over 65% of MNK’s total revenue. Generic Inomax could hurt revenue, EBITDA and the company’s credit metrics. MNK remains a sell.

The invalidation of the Mallinckrodt patents covering the Inomax treatment is a significant blow to the pharmaceutical company as Inomax sales reportedly contribute about 15 percent of Mallinckrodt’s overall revenues.

The order invalidating Mallinckrodt’s respiratory treatment patents arises out of a patent infringement suit filed in February 2015 by Ikaria Inc. and its subsidiary INO Therapeutics, which developed the patented technologies, against Praxair. The ruling came in a lawsuit brought by Mallinckrodt against the industrial gases company Praxair Inc, which sought to market a generic version of Inomax. The judge found Praxair did not infringe Mallinckrodt’s patents.

Source: Reuters

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