Intra-Cellular Therapies Settles CAPLYTA® (lumateperone) Patent Litigation with Sandoz 

Rhea-AI Summary

Intra-Cellular Therapies (ITCI) has reached a settlement agreement with Sandoz Inc. regarding patent litigation over CAPLYTA® (lumateperone), their CNS disorder therapeutic product. The litigation arose from Sandoz's submission of an Abbreviated New Drug Application seeking approval for a generic version of CAPLYTA in the United States.

Under the settlement terms, Sandoz will be permitted to begin selling generic versions of CAPLYTA on July 1, 2040, or earlier under certain circumstances. The agreement will be submitted to the U.S. Federal Trade Commission and Department of Justice for review. Similar patent litigation against other parties remains ongoing in the U.S. District Court for the District of New Jersey.

Positive

• Patent protection for CAPLYTA secured until July 2040, ensuring market exclusivity
• Settlement eliminates uncertainty and legal costs with one generic competitor

Negative

• Potential for generic competition earlier than July 2040 under certain circumstances
• Ongoing patent litigation with other parties continues to pose risks

Insights

Legal Expert

This patent settlement with Sandoz represents a significant legal victory for Intra-Cellular Therapies, effectively protecting CAPLYTA's market exclusivity until mid-2040. The agreement's timing is particularly strategic, as it aligns with the natural lifecycle of branded pharmaceuticals while providing clear market certainty for over 15 years. The July 2040 entry date suggests ITCI negotiated from a position of strength regarding their patent portfolio.

The inclusion of potential "earlier circumstances" is standard language in these agreements, typically referring to scenarios like at-risk launches by other generics or patent invalidation. Notably, ITCI maintains ongoing litigation with other ANDA filers, indicating a comprehensive patent defense strategy. The FTC/DOJ review requirement ensures compliance with antitrust laws, though settlements of this nature rarely face significant regulatory pushback.

Financial Analyst

This settlement substantially de-risks ITCI's revenue stream for CAPLYTA, their flagship product which generated $458 million in revenue for the first nine months of 2024. The 2040 entry date provides exceptional visibility for future earnings and cash flows, likely to positively impact the company's valuation metrics. For context, most branded CNS drugs typically face generic competition much earlier in their lifecycle.

The extended exclusivity period allows ITCI to continue investing in CAPLYTA's commercial expansion and potential new indications without immediate generic threat. The settlement eliminates one significant overhang on the stock, though investors should monitor the remaining patent litigation cases. Market reaction should be positive as this agreement solidifies CAPLYTA's position as a long-term growth driver.

Market Research Analyst

The CNS therapeutics market context makes this settlement particularly valuable. CAPLYTA, as a leading treatment for schizophrenia and bipolar depression, operates in a market projected to reach $205 billion by 2028. The settlement ensures ITCI can continue capturing market share without immediate pricing pressure from Sandoz, one of the largest generic manufacturers globally.

The 2040 timeline provides important runway for CAPLYTA to potentially expand into additional indications and patient populations. With major CNS drugs facing patent cliffs much earlier, this positions ITCI advantageously against competitors. The remaining patent litigation outcomes will be crucial, but securing this agreement with a major generic player like Sandoz sets a strong precedent for future settlements.

BEDMINSTER, N.J., Jan. 10, 2025 (GLOBE NEWSWIRE) -- Intra-Cellular Therapies, Inc. (Nasdaq: ITCI), a biopharmaceutical company focused on the development and commercialization of therapeutics for central nervous system (CNS) disorders, today announced that it has entered into a settlement agreement with Sandoz Inc. (Sandoz) resolving patent litigation related to Intra-Cellular Therapies’ product CAPLYTA® (lumateperone). The litigation, which is pending in the U.S. District Court for the District of New Jersey, resulted from submission by Sandoz of an Abbreviated New Drug Application to the U.S. Food and Drug Administration seeking approval to market a generic equivalent of CAPLYTA in the United States. The settlement agreement permits Sandoz to begin selling generic versions of CAPLYTA on July 1, 2040, or earlier under certain circumstances. As required by law, Intra-Cellular Therapies will submit the agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice. Similar patent litigation brought by Intra-Cellular Therapies against other parties remains pending in the U.S. District Court for the District of New Jersey. 

About Intra-Cellular Therapies

Intra-Cellular Therapies is a biopharmaceutical company founded on Nobel prize-winning research that allows us to understand how therapies affect the inner-workings of cells in the body. The company leverages this intracellular approach to develop innovative treatments for people living with complex psychiatric and neurologic diseases. For more information, please visit www.intracellulartherapies.com.

Contact:

Intra-Cellular Therapies, Inc.
Juan Sanchez, M.D.
Vice President, Corporate Communications and Investor Relations
646-440-9333

Burns McClellan, Inc.
Cameron Radinovic
cradinovic@burnsmc.com
646-930-4406

FAQ

When can Sandoz begin selling generic versions of CAPLYTA after the ITCI settlement?

According to the settlement agreement, Sandoz can begin selling generic versions of CAPLYTA on July 1, 2040, or earlier under certain circumstances.

What triggered the patent litigation between ITCI and Sandoz?

The litigation was triggered by Sandoz's submission of an Abbreviated New Drug Application to the FDA seeking approval to market a generic equivalent of CAPLYTA in the United States.

Does the ITCI-Sandoz settlement resolve all pending CAPLYTA patent litigation?

No, similar patent litigation brought by Intra-Cellular Therapies against other parties remains pending in the U.S. District Court for the District of New Jersey.

What regulatory review is required for the ITCI-Sandoz patent settlement?

The settlement agreement must be submitted to the U.S. Federal Trade Commission and the U.S. Department of Justice for review, as required by law.