The judge mandated a ruling today and it was VERY interesting. I'll summarize and then give my Good/Bad/Genius playouts here.
Elite agreed to not market/sell generic Oxy until Purdue patent expires in Aug 2027. Both parties agreed to drop the lawsuit with no damages. Elite to modify to a paragraph 3 filing.
**The Good**: Once again, Nasrat has deftly navigated this whole legal scenario with absolute minimal legal fees. First he let Accord battle out the majority of the lawsuit while he had Elite sit in the background without having to front costs. When Accord's battle was done, he picked up the remaining pieces and negotiated a path for Elite. At first look, it looks neutral since the timeline is a wait time to sell, but there are no risks of damages and future legal fees. Remember, even Accord still has to wait to sell. So, everyone was waiting anyways. This is a minor to major plus in my opinion.
**The Ugly**: Yes, we DO have to wait for revenues from this drug. That just is what it is. Nothing to sugarcoat on this, but it's not like this wasn't going to be the case anyways. Purdue was going to drag this as far out as possible.
***The Genius***: This is the part that I don't think anyone is going to think about at first glance. When Elite modifies to a paragraph 3 filing, they can get a tentative approval to sell Oxy based on their ANDA application from years ago. THEN that tentative approval has to sit, BUT it can be final approved the day after the patent expires. Here's where it gets REALLY good. Accord will likely get the "first filer" benefit for 180 day exclusive right to sell while others have to wait. Sounds bad for Elite, right? WRONG. The exclusive right blocks any NEW companies from filing for approval, but Elite already filed. Therefore, just like with the legal fees, Elite would get to tuck right under with Accord as well and get to sell during that 180 day window as well. That is absolute legal genius. This is MY understanding of the law. From the research I've done, Accord and Elite will have a nice big boon as a bonus for their efforts of fighting a juggernaut.
BONUS: This clears legal. Why is that important? When you are buying an asset, you want to make sure there are no "clouds" on title or that surround the business. ESPECIALLY, if a board or bank has to approve financing or acquisition. This would most likely have been a factor for any company looking to acquire ELTP, and now that factor is cleared. Elite will only do that at the right price, and if they don't, they have 2 massive drugs coming in 2027 to ramp revenues up 500 to 600% if they decided to uplist instead.
Congrats, longs!
Wolv