Exelixis Announces Settlement of CABOMETYX® (cabozantinib) Patent Litigation with Cipla Limited and Cipla USA

Rhea-AI Summary

Exelixis (Nasdaq: EXEL) announced a settlement with Cipla and Cipla USA, Inc. regarding two patent litigations over CABOMETYX® (cabozantinib) tablets. The disputes stemmed from Cipla's ANDA seeking approval to market generic versions of CABOMETYX before the expiration of Exelixis' patents. The first litigation, filed on March 16, 2023, concerned a 60 mg dosage, and the second, filed on May 9, 2024, involved 20 mg and 40 mg dosages. Under the settlement, Cipla will be licensed to market generic CABOMETYX in the US from January 1, 2031, conditional on FDA approval. All ongoing litigation will be terminated, subject to FTC and DOJ review. The agreement details remain confidential.

Positive

• Settlement resolves ongoing patent litigation, reducing legal uncertainties.
• Cipla granted license to market generic CABOMETYX from January 1, 2031, potentially extending market exclusivity until then.
• Termination of litigation reduces future legal expenses.
• Agreement subject to FTC and DOJ review, ensuring regulatory compliance.

Negative

• Potential future competition from generic CABOMETYX post-January 1, 2031 may impact market share.
• Details of the agreement are confidential, adding lack of transparency for investors.
• Financial impact of the settlement on Exelixis not disclosed.

Insights

Legal Expert

The settlement between Exelixis and Cipla resolves ongoing patent litigation related to the marketing of generic CABOMETYX. This is a significant legal development as it sets a date for Cipla to enter the market with generics, specifically January 1, 2031. From a legal standpoint, this agreement mitigates uncertainties around patent disputes that could have prolonged legal battles, resulting in high legal costs and potential market disruptions. Additionally, the settlement being contingent on FDA approval and FTC review underscores the regulatory oversight in such agreements. Investors should note that the legal resolution is a strategic move by Exelixis to protect its intellectual property while allowing for future market entry by generics.

Financial Analyst

Financially, this settlement provides Exelixis with a clear timeline to maximize revenue from CABOMETYX before the introduction of generics in 2031. This extended market exclusivity is important for sustaining the company's revenue streams and supports financial stability and growth over the next seven years. The agreement likely prevents potential revenue loss and market share erosion that could have occurred if Cipla's generics were introduced sooner. Moreover, the termination of ongoing litigation removes legal expenses from Exelixis' financials, enhancing its profitability. Investors should evaluate this as a positive outcome as it offers predictability and stability in the company's earnings.

Market Research Analyst

From a market perspective, the settlement allows Exelixis to maintain a competitive edge in the oncology drug market by protecting CABOMETYX until 2031. This period can be used to strengthen its market presence, possibly introducing new products or expanding the usage of CABOMETYX. The future entry of generics by Cipla means that Exelixis must strategize to keep its market share, possibly through innovation or competitive pricing post-2031. Market stakeholders should recognize this settlement as a chance for Exelixis to bolster its market position while preparing for the eventual competition from generics.

ALAMEDA, Calif.--(BUSINESS WIRE)-- Exelixis, Inc. (Nasdaq: EXEL) today announced that it has entered into a Settlement and License Agreement (Agreement) with Cipla Ltd. and Cipla USA, Inc. (collectively Cipla). This settlement resolves two patent litigations brought by Exelixis in response to Cipla’s Abbreviated New Drug Application (ANDA) seeking approval to market generic versions of CABOMETYX® (cabozantinib) tablets prior to the expiration of the applicable patents. The first case (Civil Action No. 23-287), filed on March 16, 2023, relates to Cipla’s ANDA for a 60 mg cabozantinib dosage strength. The second case (Civil Action No. 24-565-RGA), filed on May 9, 2024, relates to a recent amendment to Cipla’s ANDA, for the primary purpose of seeking additional approval for 20 mg and 40 mg cabozantinib dosage strengths.

Pursuant to the terms of the Agreement, Exelixis will grant Cipla a license to market generic versions of CABOMETYX in the United States beginning on January 1, 2031, if approved by the U.S. Food and Drug Administration and subject to conditions and exceptions common to agreements of this type.

Additionally, in accordance with the Agreement, the parties will terminate all ongoing Hatch-Waxman litigation between Exelixis and Cipla regarding CABOMETYX patents pending in the U.S. District Court for the District of Delaware.

The Agreement is confidential and subject to review by the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice. The lawsuits will be dismissed after a period of time to allow for FTC review.

About Exelixis

Exelixis is a globally ambitious oncology company innovating next-generation medicines and regimens at the forefront of cancer care. Powered by drug discovery and development excellence, we are rapidly evolving our product portfolio to target an expanding range of tumor types and indications with our clinically differentiated pipeline of small molecules, antibody-drug conjugates and other biotherapeutics. This comprehensive approach harnesses decades of robust investment in our science and partnerships to advance our investigational programs and extend the impact of our flagship commercial product, CABOMETYX® (cabozantinib). Exelixis is driven by a bold scientific pursuit to create transformational treatments that give more patients hope for the future. For information about the company and its mission to help cancer patients recover stronger and live longer, visit www.exelixis.com, follow @ExelixisInc on X (Twitter), like Exelixis, Inc. on Facebook and follow Exelixis on LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements, including, without limitation, statements related to: Exelixis’ obligations under the Agreement, including Exelixis’ granting of a license to Cipla to market generic versions of CABOMETYX in the United States beginning on January 1, 2031 and termination by the parties of all ongoing Hatch-Waxman litigation regarding CABOMETYX patents; and the expectation that the lawsuits will be dismissed after a period of time following FTC review. Any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and are based upon Exelixis’ current plans, assumptions, beliefs, expectations, estimates and projections. Forward-looking statements involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, which include, without limitation: Exelixis’ ability to effect its obligations under the Agreement; and other factors detailed from time to time under the caption “Risk Factors” in Exelixis’ most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and in Exelixis’ other future filings with the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Exelixis as of the date of this press release, and Exelixis undertakes no obligation to update or revise any forward-looking statements contained herein, except as required by law.

Exelixis, the Exelixis logo and CABOMETYX are registered U.S. trademarks of Exelixis.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520945977/en/

Investors:

Susan Hubbard

EVP, Public Affairs and Investor Relations

(650) 837-8194

shubbard@exelixis.com

Media:

Claire McConnaughey

Senior Director, Public Affairs

(650) 837-7052

cmcconn@exelixis.com

Source: Exelixis, Inc.

FAQ

What is the settlement between Exelixis and Cipla about?

The settlement resolves patent litigations regarding generic CABOMETYX tablets, allowing Cipla to market them from January 1, 2031.

When was the first litigation filed by Exelixis?

The first litigation was filed on March 16, 2023, concerning a 60 mg dosage of cabozantinib.

What are the terms of the settlement between Exelixis and Cipla?

Cipla will be licensed to market generic CABOMETYX from January 1, 2031, pending FDA approval, and all ongoing litigation will be terminated.

What conditions apply to Cipla's ability to market generic CABOMETYX?

Cipla can market generic CABOMETYX starting January 1, 2031, subject to FDA approval and common agreement conditions.

How will this settlement impact Exelixis' legal expenses?

The termination of litigation will likely reduce future legal expenses for Exelixis.