Intra-Cellular settlement with Sandoz ‘clear positive,’ says JPMorgan

JPMorgan analyst Jessica Fye says Intra-Cellular’s (ITCI) settlement with Sandoz over the Caplyta patent litigation is a “clear positive.” The settlement will allow Sandoz to launch Caplyta on July 1, 2040, or earlier in certain circumstances, the analyst tells investors in a research note. The firm says this represents a potentially much longer time to generic entry relative to what its model assumes and what the buy-side has been expecting. Its model currently reflects generic entry beginning in 2034. An additional six years at peak revenue with no generic competition “is valuable in and of itself,” and while Caplyta is generally expected to become a multi-billion dollar product, the market has debated Intra-Cellular’s strategic interest in light of what has been uncertain durability for Caplyta, contends JPMorgan. The firm reiterates an Overweight rating on Intra-Cellular and expects upward revisions to consensus price targets on the news.