The favorable US Supreme Court (SC) verdict enables generic companies to seek correction of use codes; however, the appeals court ruling on whether this correction applies to the case of Caraco versus Novo is still pending. We highlight that the verdict is being misinterpreted by the Street and that the final approval is contingent on (1) favorable appeals court ruling of either ‘invalidity’ of existing patent or ‘incorrect broadening of use codes’ and (2) successful site transfer. Given that Novo filed its appeal in1Q2012, appeals court ruling and thereby final FDA approval may still be some time away
Prandin is FDA-approved for three uses only, one of which was covered by patent when Caraco filed its ANDA. Hence Caraco in 2008 filed a section 8 statement which seeks approval for two other uses not covered by the patent listed in orange book. However, Novo changed its use code for the ‘358 patent broadening the scope of the use code to cover all three approved uses.
Given that Novo filed its appeal in 1Q2012, final FDA approval may still be some time away assuming site transfer of Prandin has been successfully completed. Since Caraco converted its section 8 filing into a para IV filing, appeals court has to rule favorably towards either (1) invalidity of patent (lower court ruling went in favor of Caraco) or (2) incorrect usage of use codes (possible now post SC ruling) in which case Sun will get an approval for section 8 filing. In case FDA approval comes earlier than the appeals court ruling which is unlikely in our view, Sun has the option to launch at-risk
