Shhhh, TSC has a tip. Actually, this is sort of interesting:
Three More Patent Plays
By John Rubino
Special to TheStreet.com
5/4/01 8:29 AM ET
To everyone who responded to last week's column by sending in your favorite patent litigation plays, many thanks. Normally, I don't do consecutive columns on the same subject, but some of these stories are too good not to broadcast. The following, for instance:
Napro Biotherapeutics (NPRO:Nasdaq - news) holds what looks like a rock-solid patent covering the formulation of a drug called paclitaxel, which, under the brand name Taxol, is Bristol-Myers' (BMY:NYSE - news) -- and the world's -- biggest selling cancer drug.
Paclitaxel was discovered by the National Institutes of Health, so the compound itself isn't able to be patented. Bristol-Myers, however, has gotten around this by patenting things like use and dosage, which so far has given it a near-monopoly.
What follows comes from a money manager who's long the stock, and wants to remain anonymous: Later this year, in partnership with Abbott Labs (ABT:NYSE - news), Napro will bring out its own generic version of paclitaxel, which my source thinks will grab 30% of the market, netting Napro $2 to $3 a share. At the current price of $7, this alone makes it a buy.
But the real upside comes from a suit that Napro has filed against Bristol-Myers, alleging patent violation on recent sales of Taxol. The case will be tried some time in 2002, and more than likely appealed into 2003, so it's a long way from yielding any actual cash. But "Napro's position is quite strong," says my source. And the numbers it's seeking -- treble damages on revenue of over $1 billion a year -- make this case a potential blockbuster for a company with a market cap of only $200 million.
Wilder |
