Favorable Patent Settlement With Par – A Strong Win For Sucampo, Says Roth Capital


In a research report released to investors today, analyst Ed Arce of Roth Capital reiterated a Buy rating on Sucampo (NASDAQ:SCMP) with a $9.00 price target, following the news that the company has settled with Par, granting it a non-exclusive license to sell its generic version of Amitiza beginning January 1, 2021. However, Par will have to split with Sucampo all gross profits on its generic Amitiza for nearly seven years (through Oct. 2027).

Arce noted, “In a surprise kicker, beginning in 2021, Par will split all gross profits from the sale of its generic lubiprostone with Sucampo through the term of the agreement, which “continues until each of the Sucampo patents has expired.” We note that the FDA’s Orange Book currently lists 16 issued patents covering lubiprostone, with the latest (carrying a drug product claim) expiring on October 25, 2027.” The analyst added, ‘We view this as a strong win for Sucampo. Not only did it retain exclusivity through 2020 (as we have modeled), but it also captures significant revenues for seven years after its partnership with Takeda expires.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ed Arce has a total average return of 18.9% and a 36.4% success rate. Arce has a -7.8% average return when recommending SCMP, and is ranked #295 out of 3319 analysts.

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