Shares in Mallinckrodt Hospital Products (NYSE: MNK) have fallen 19% since a federal appeals court ruled on Tuesday that industrial gas company Praxair did not infringe its patents for a nitric oxide (iNO) delivery system.
Nitric oxide gas has long been used to treat infants experiencing hypoxic respiratory failure and Mallinckrodt is the exclusive U.S. supplier of iNO gas, which it sells under the brand name INOmax. Praxair started manufacturing generic iNO gas cylinders and filed for abbreviated new drug application (ANDA) approval from the FDA to market Noxivent, a generic form of 100 and 800 ppm nitric oxide gas for inhalation. (The FDA approved its application in October 2018.) Praxair also acquired a company that developed a gas delivery system, called the NOxBOXi iNO system.
Mallinckrodt sued Praxair in U.S. District Court in Delaware in 2015, alleging that Praxair’s Noxivent infringed Mallinckrodt’s heart failure patents and device claims of its delivery system infrared (DSIR) patents when used with Mallinckrodt’s DSIR system. Mallinckrodt also alleged that Praxair’s proposed NOxBOXi device infringed a method claim of the DSIR patents Mallinckrodt acquired Ikaria in 2015.
In September 2017, the district court concluded that Mallinckrodt’s heart failure patents were ineligible under U.S. patent law and the DSIR patents were not infringed. The appeals court agreed.
Mallinckrodt said it was “disappointed” in the appeals court’s ruling and that it would consider its legal options.
“Mallinckrodt is confident its well-established presence and INOmax Total Care, its comprehensive product and service offering, are highly valued by customers,” the company said in a statement. “The company believes that the prospects for a newcomer succeeding in this market are by no means a foregone conclusion. Mallinckrodt remains committed to INOmax, and to the patients and customers it serves.”