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Research of Jefferies. 22-Mar-12 01:22 pm Better-Than-Expected Patent Term Adjustment For ‘598 Patent
Key Takeaway
The PTO website lists the total patent term adjustment for the ‘598 patent application as 498 days, which would put patent expiration at 6/8/2021. With Hatch-Waxman and pediatric extension, we believe exclusivity for AMR-101 could last until at least April 2022. We see this as an incremental positive for AMRN.
Context: ‘598 Notice Of Allowance Published On PTO Website. On 3/20, we noted the PTO website changed the status of the ‘598 application (12/052,598) to indicate that it had been allowed, although it has yet to be made publically available. As a reminder, the ‘598 application is for a composition/ formulation patent (pure EPA/no DHA). We have previously noted that the lengthy PTO review of the ‘598 patent could result in upside from the base case of 1/27/2020, as a result of patent term adjustment (PTA).
What’s New: PTO Website Lists Total Patent Term Adjustments Of 498 Days. The PTO website now includes a “Patent Term Adjustments” tab for ‘598, which suggests a total PTA adjustment of 498 days. This potentially extends the expiry of the ‘598 patent to 6/8/2021. We note that the website indicates that the notice of allowance will be mailed on 3/22.
Background on the PTA Calculation. In principle, the patent term adjustment grants additional exclusivity to credit an application for PTO delays in review. There are three principles under which a PTA delay can occur (failure to act, interference/appeals, and “3 year pendency”) and the PTO indicates the '598 delays arose from the “failure to act” basis determining “Type A” delays. The failure-to-act basis follows the so called “14-4-4-4” rule with credit given for not meeting standards for the PTO to act: 1) within 14 months after the filing date, 2) 4 months after a reply or appeal, 3) 4 months after a decision by a Board of Appeals or court, and 4) 4 months to issue a patent after the fee payment. First, the 14-month rule gives ‘598 credit back for responding (on 12/31/2009) 225 days past the 14-month mark after the filing date (=651 days- 426 days, based on AMRN’s filing date of 3/20/2008). Furthermore, the 4-month response rule gives AMRN credit for issuing the mail notice of allowance (which will be tomorrow March 22nd) 273 days past the 4-month mark (=393 days-120 days) after the request for continued examination (made on 2/23/2011). In total, this gives the 498 non-overlapping days of PTA that the PTO calculates.
Our Take: PTA Provides Upside To ‘598 Base Case Of 2020, With Potential Further Upside From Patent Extension and Pediatric Exclusivity To April 2022. The addition of 16+ months PTA to the expiry of the ‘598 patent is upside to the base case of 2020 expiry and above our modeled assumption of 14 months PTA. We see this favorable PTA determination as a positive for AMRN, as it raises the floor for AMR101 exclusivity, as we await further determination on the MARINE and ANCHOR patent that may extend exclusivity through 2030. Beyond the PTA adjusted June 2021 expiry, we believe that ‘598 exclusivity could be further extended with a combination of 4 months H-W patent extension/restoration and 6-months pediatric exclusivity, pushing potential ‘598 patent protection into April 2022. Near term, we believe the guaranteed PTA extension could facilitate discussions with pharma suitors |
