Aralez Pharmaceuticals Inc. (NASDAQ:ARLZ) announced that the United States District Court for the District of New Jersey upheld the validity of two patents owned by a subsidiary of Aralez and licensed to Horizon Pharma (NASDAQ:HZNP) covering VIMOVO® (naproxen/esomeprazole magnesium), and that Dr. Reddy’s Laboratories Inc., Dr. Reddy’s Laboratories, Mylan Pharmaceuticals, Mylan Laboratories, Mylan Inc., Lupin Ltd. and Lupin Pharmaceuticals Inc. would infringe at least one of the two patents with their proposed generic naproxen/esomeprazole magnesium products.

Aralez Pharmaceuticals shares reacted to the news, rising nearly 8% to $1.39 in pre-market trading.

On April 21, 2011, July 25, 2011, and June 28, 2013, an Aralez subsidiary filed patent infringement lawsuits in District Court against Dr. Reddy’s, Lupin, and Mylan, respectively, related to Abbreviated New Drug Applications filed with the U.S. Food and Drug Administration to market generic versions of VIMOVO.  The lawsuits claim infringement of U.S. Patent Nos. 8,557,285 (‘285 patent) and 6,926,907 (‘907 patent) titled “Pharmaceutical Compositions for the Coordinated Delivery of NSAIDs,” which cover VIMOVO.  The District Court’s decision was made based on the validity of the ‘285 and ‘907 patents for VIMOVO and the Court’s judgment will prevent Dr. Reddy’s, Mylan, and Lupin from launching generic versions of VIMOVO in the United States until at least the expiration of the relevant patent.

“We are very pleased that the fair and appropriate ruling regarding this litigation was rendered by the United States District Court for the District of New Jersey,” said Adrian Adams, Chief Executive Officer of Aralez. “This demonstrates the strength of our intellectual property portfolio for VIMOVO and Yosprala®. We remain committed to aggressively defending our intellectual property.”

VIMOVO has 14 Orange Book listed patents with terms that extend to 2031. The ‘907 patent is also listed in the Orange Book for Yosprala (aspirin/omeprazole) and has been asserted against Teva Pharmaceuticals US Inc. in a separate patent infringement case.

On the ratings front, Chardan analyst Keay Nakae reiterated a Buy rating on ARLZ, with a price target of $5.50, in a report issued on March 15. The current price target implies an upside of 326% from current levels. According to TipRanks.com, Nakae has a yearly average loss of 25.8%, a 28% success rate, and is ranked #4523 out of 4596 analysts.