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Bausch (BHC) to Appeal Regarding Xifaxan Patent Decision

·2-min read

Bausch Health Companies Inc. BHC has announced that it will appeal to the U.S. Court of Appeals for the Federal Circuit for the Xifaxan (rifaximin) 550 mg patent decision.

The announcement is consistent with the company’s previous statement.  Xifaxan tablets are indicated for reducing the risk of overt hepatic encephalopathy (HE) recurrence in adults and treating irritable bowel syndrome with diarrhea (IBS-D) in adults.

The U.S. District Court of Delaware has issued a decision in the matter of Salix Pharmaceuticals, Ltd. et al v. Norwich Pharmaceuticals, Inc., finding certain Xifaxan HE patents valid and infringed and certain Xifaxan composition and IBS-D patents invalid.

We note that Norwich Pharmaceuticals has submitted an abbreviated new drug application (ANDA) for the generic Xifaxan. To date, Norwich has not received tentative or final approval of its ANDA from the FDA.

Bausch previously entered into settlement agreements with leading generic companies like Teva TEVA, Sun Pharmaceuticals and Novartis’ NVS Sandoz to permit a generic rifaximin product entry in 2028 or upon an earlier approval and launch of a generic rifaximin product.

If Norwich’s ANDA gets FDA approval and the company subsequently launches a generic rifaximin product, Teva, Sun Pharmaceuticals and Novartis’ Sandoz will not be permitted to introduce a generic version of the drug before 2028. The agreement with Novartis was reached in 2020.

Per Bausch, unless and until FDA approves a revised ANDA by Norwich that omits the HE indication and any injunction issued by the Court is modified, Norwich is not permitted to launch a generic equivalent of rifaximin.

The Xifaxan patent litigation will remain an overhang on the shares, and an earlier-than-expected generic entry will adversely impact the top line.

Meanwhile, Bausch's second-quarter results were dismal. The company’s adjusted earnings per share of 55 cents missed the Zacks Consensus Estimate of 89 cents and decreased from 98 cents reported in the year-ago quarter.

Total revenues of $1.97 billion missed the Zacks Consensus Estimate of $2 billion and fell 6% year over year.

The lowering of the guidance disappointed investors. Revenues are now expected in the $8.05-$8.22 billion range (earlier projection: $8.25-$8.40 billion) due to the uncertainties in the overall operating environment.

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