Bausch Health resolves intellectual property litigation with Sandoz

• Bausch Health (TSX:BHC) has agreed to resolve its outstanding intellectual property litigation over XIFAXAN tablets with Sandoz Incorporated
• The company, its subsidiary Salix, and Salix’s licensor Alfasigma, all took part in the resolution over the contested drugs
• The three parties will grant Sandoz a non-exclusive US license to the intellectual property, beginning January 1, 2028
• While litigation between the parties will be dismissed, Bausch and its parties will continue to defend its XIFAXAN patents
• Bausch Health is up 0.48 per cent, and is currently trading for C$16.86 per share

Bausch Health (TSX:BHC) has agreed to resolve its outstanding intellectual property litigation over XIFAXAN tablets with Sandoz Incorporated.

The dispute was over the intellectual property around 550 milligram XIFAXAN (rifaximin) tablets. 

The company, its subsidiary Salix Pharmaceuticals, and Salix’s licensor Alfasigma SpA all agreed to the resolution. The three companies (collectively, the Salix Parties) will maintain market exclusivity for the tablets until 2028.

However, the Salix Parties will grant Sandoz a non-exclusive license to the XIFAXAN tablet intellectual property. The license will be for the United States, and will begin on January 1, 2028.

Per the agreement, Sandoz will have the right to market a royalty-free generic version of XIFAXIN 550 milligram tablets, starting January 2028. This is assuming that the company receives approval from the US Food and Drug Administration (FDA) on its Abbreviated New Drug Application.

However, Sandoz may begin marketing the medicine earlier if another generic rifaximin product gains approval and starts selling before January 1, 2028.

As a result of this agreement, the litigation between the parties relating to XIFAXAN will be dismissed. As such, all intellectual property which protects the drug remains intact.

However, Bausch Health and Alfasigma will continue to vigorously defend the patents for XIFAXAN. No less than 23 patents protect the drug’s composition of matter and use. These are all in the FDA’s Orange Book, the publication which lists ‘Approved Drug Products with Therapeutic Equivalence Evaluations’.

This is not the first time that Bausch Health has litigated over the intellectual property of XIFAXAN 550 milligram tablets. In September 2018, the company resolved a similar dispute with Actavis Laboratories FL, Inc. 

Under the terms of that agreement, the Salix Parties granted Actavis the same deal which it did to Sandoz.

Bausch Health is up 0.48 per cent, and is trading for $16.86 per share, as of 1:36pm EDT.