No. of Recommendations: 9
I wouldn't put any money on TKTX winning this one.

The judge has already ruled that TKTX is infringing one of AMGN's Epogen patents. Therefore, the only way out of this hole for TKTX is to prove inequitable conduct or prior art invalidates this patent (they probably have to take this same approach with all of the patents in question). Allegations of this sort have traditionally been very difficult to prove in court.

I spoke with an AMGN VP recently, and he didn't sound too worried.

Also, it seems likely that AMGN's improved EPO variant, NESP, has an extremely good chance of being approved. Even if TKTX wins, their generic will have to compete with NESP, which has a huge advantage because it only has to be injected once a week. AMGN can also use this to cannibalize J&J's Epogen sales in Europe.

Finally, it's hard to imagine that TKTX's technology can cost effectively compete with AMGN's. I'd be very surprised if any human cells they have can produce as much Epogen as cheaply as AMGN's CHO production system. It will also be hard to get a human production system past the FDA. For saftey reasons they are very biased towards non-human systems (particularly CHO cells, which are hamster).

Frankly, one way or another, it's hard to see how AMGN can really loose. Given all this, I'm amazed TKTX could find a big Pharma partner willing to back them. Maybe there is no upfront money.

Incidentally, TKTX is not the only one trying to do this. Athersys' technology sounds identical, so if TKTX were to win, they would probably also get sued by Athersys.

AMGN at 50 was a bargain. Once again, Wall Street is completely clueless. But I'm an AMGN shareholder, so I may be a bit biased!

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