By 
Enanta Pharmaceuticals
ENTA,
+2.95%
filed a lawsuit against Pfizer
PFE,
+2.00%
over Paxlovid, alleging that the COVID-19 antiviral expected to bring in $22 billion in sales this year is based on a patent first filed by Enanta scientists.
Enanta’s stock was trading about 3% higher Wednesday.
The suit, which was filed Tuesday in U.S. District Court in Massachusetts, alleges that Enanta filed an application with the U.S. Patent and Trademark Office “describing coronavirus protease inhibitors invented by Enanta scientists” in July 2020. Pfizer’s patent for Paxlovid appears to have been filed three months later, and Enanta’s patent “does appear to cover the chemical space Paxlovid is in,” RBC Capital Markets analyst Brian Abrahams told investors this week.
Enanta said it is seeking compensation and does not want to stop the distribution or manufacture of the drug, citing the “importance of Paxlovid’s availability to patients.”
Paxlovid has played a crucial role for the last six months of the pandemic. Not only was it the first COVID-19 antiviral to be made available for patients use at home, it’s also been viewed as a game-changing tool that has helped keep people out of the hospital and from dying.
Enanta is a small clinical-stage biotech that is developing treatments for diseases like hepatitis C, respiratory syncytial virus, and COVID-19. Its primary revenue stream comes from Mavyret, a hepatitis C treatment for which the company received about $97 million in royalties from AbbVie
ABBV,
+2.85%
in its last fiscal year, which ended Sept. 30. (AbbVie, which holds worldwide marketing and sales rights to the drug, reported $1.7 billion in revenue for Mavyret in 2021.)
“If Enanta’s claims have merit, we think a possible base case settlement scenario could award Enanta with a ‘reasonable royalty,’” SVB Securities analyst Roanna Ruiz wrote in an investor note on Wednesday. “However, it is not clear to us whether Enanta could avoid the possible glass half empty” downside scenario either.”
In that scenario, Pfizer could seek to invalidate Enanta’s patent for its own COVID-19 antiviral candidate, which is currently in Phase 1 clinical trials.
A Pfizer spokesperson said the company did not have a statement responding to the lawsuit.
Enanta’s stock has tumbled 46.1% so far this year. The broader S&P 500
SPX,
-0.13%
has declined 21.0%.
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