Keryx Biopharmaceuticals’ intellectual property for Zerenex will provide patent protection until 2024; reaffirm Market Outperform rating and $22 year-end 2014 price target based on DCF and SOTP analyses. Yesterday, Galencia confirmed that its recently approved drug Velphoro was not granted marketing exclusivity as a new chemical entity (NCE) by the FDA.
Analysts remind investors that a NCE designation confers an additional five years of marketing exclusivity against generic competition. This ruling was based on the rationale that the active ingredient in Velphoro, ferric iron, is already the active ingredient in drugs previously approved by the FDA. While on the surface this may seem to indicate a similar fate for Zerenex, we believe a NCE designation may be less important given two key patents covering the drug substance, surface area, and intrinsic dissolution that are sufficient to protect Zerenex from generic competition until 2024.
These are patents with composition claims that are not process dependent. In addition, Keryx has a method of use patent on Zerenex that, though set to expire in 2017, may be eligible for Patent Term Extension. We remind investors that while NCE designation is administered by the FDA, PTE is determined by the U.S. patent office.