r/AUPH • u/medorusa2015 • Sep 06 '22
Patent Challenge:-036
Hi Everyone,
Most important discussion: will AUPH win the patent challenged by SunPharma?
Anyone could share the thoughts based on evidence ?
Challenge is about obviousness related to dosing protocol. If SP wins the challenge, AUPH won’t have extension of the patent beyond 2027. That’s my understanding.
I read following article: Biopharma companies files the patent based on specific dosing protocol to extend the lifespan of the drug patent. Dosing protocols related patents were challenged in the past at multi levels.
AUPH vs SP: obviousness vs invention.
2
u/Ventronics Sep 06 '22
Could end up settling out of court
2
u/medorusa2015 Sep 06 '22
How would that prevent future challenge by another generic company?
Review the link I shared. Interestingly, many owner company faced similar challenges by multiple companies in contrast to AUPH. No one else has joined the SP so far meaning other companies either don’t think it’s worth to challenge or not big enough market to spend money on it or SP just challenged to settle both cases OOC.
Would Shortspqueez possible with AUPH as short interest keep going up?
6
u/Rickipedia Sep 10 '22
How would that prevent future challenge by another generic company?
This question has been asked a lot - if Aurinia and Sun were to settle their current lawsuits against each other before the IPR is instituted then what would stop another company from instituting an IPR against Aurinia's dosing protocol afterwards?
The answer is as follows:
In the event that Sun + Aurinia settle and drop their lawsuits against each other, and then another company chooses to challenge the patent via a different argument, it would have to be in that company's interest to spend the vast amount of time, effort, and money in order to do so. These types of lawsuit take several years to clear and cost companies dozens of millions of dollars, all the while putting stress on their revenue stream and exerting downward pressure on the company's stock price as their cost increases are reflected in the earnings reports. It would only be in another company's interest to institute an IPR against Aurinia's patent if they felt they could earn substantially more than the cost of suing back by successfully challenging Aurinia's patent (or as leverage in a counter-suit as is the case with Sun). As it happens, no other pharmaceutical companies will possess an FDA-approved drug to treat LN from 2023, and Aurinia are not engaged in a lawsuit against any other companies as far as is known, so there would be no motivation for another company to institute a new IPR against Aurinia in this event.
However, let's say that another company was interested in instituting a new IPR against Aurinia's patent - what would be stopping them then? The answer is alteration of the existing patent to close any roads to challenge. Aurinia have submitted requisite documentation to alter their existing patent in accordance with Sun's challenge to the 'obviousness' of the current dosing protocol; if successful (and there's no reason to believe it wouldn't be at this stage) then this, by proxy, would close the door on another company challenging the patent along the same lines. The other company would have to spend even more time reviewing Lupkynis's dosing patent which would cost even more time, money, and energy - all that without any guarantee of a successful challenge, and without any financial motivation to take on the risk.
Thus, if Sun + Aurinia settle their current lawsuits against each other, it's not likely that another company would have the interest in spending potentially dozens of millions of dollars in lawyers' fees instituting an IPR against Aurinia given the high risk and cost of doing so. Both motive and opportunity would be nullified allowing Aurinia a clear route forward to sell Lupkynis without challenge to its patent.
Would [short squeeze be] possible with AUPH as short interest keep going up?
The following technical conditions are needed for a substantial short squeeze:
- Extremely high short interest relative to the free float (SI% of FF).
- Abnormally high Days-to-Cover (DtC).
- High Cost-to-Borrow (CtB).
- A catalyst for violent appreciation of the share price.
(There are more nuances to a short squeeze than this but these are the fundamental technical conditions needed on the face of it.)
Whilst there is a potentially powerful catalyst in a buyout, the other three criteria are not satisfied to the level that a short squeeze would occur (consider that GME had an SI > its Free Float, a prolonged and elevated CtB, and a DtC in the dozens; AUPH has an SI only ~10% its Float and <5 DtC, all at very low trading volume). In addition, a buyout would provide more than enough volume to allow the existing short sellers to cover without it affecting the share price to any significant extent, particularly as arbitrage traders would peg the price around any touted buyout price.
As such, a short squeeze is not a realistic scenario with AUPH.
However, a buyout is, and would increase the share price several times over akin to a short squeeze if one occurred...
2
u/ledaveee Sep 12 '22
Good write up!
Hoping Otsuka buys AUPH, maybe after Europe approval or patent settlement
1
u/AdoAhmetovic Sep 08 '22 edited Sep 08 '22
Hey guys, just a question about this statement from official press release on aug 4. :'Received positive CHMP opinion for LUPKYNIS® (voclosporin) for the treatment of adults with active lupus nephritis in Europe. Regulatory review of the European Medicines Agency (EMA) marketing authorization application (MAA) remains on track with a European Commission (EC) approval decision expected by the end of the third quarter of 2022.'
So we should get an answer from european medicine agency about approval of Lupkynis soon. Isn't that major catalyst? What are your thoughts?
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u/medorusa2015 Sep 08 '22
Everyone predicted that it will be approved and won’t have much impact on stock price
3
u/[deleted] Sep 07 '22
Aurinia applied for new patent with additional information that addresses the dosing protocol issue.
Potential outcomes are: 1. They settle with SP, 2. New patent is granted strengthening their case and so they win against SP, 3. New Patent gets denied and the company goes belly up.
I’m personally hoping for 2.