text: Eli Lilly Rebounds On Chemo-Drug Patent Win Vs. Generic Teva | Stock News & Stock Market Analysis - IBD
  Eli Lilly Rebounds On Chemo-Drug Patent Win Vs. Generic Teva
  An appeals court upheld a favorable patent ruling for Eli Lilly. (Jonathan Weiss/Shutterstock.com)
  Eli Lilly (LLY) stock bounded Thursday after a federal appellate court upheld the patent on chemotherapy Alimta vs. generic drugmaker Teva Pharmaceutical (TEVA) — the third U.S. court in three years to do so.
  The U.S. Court of Appeals ruled early Thursday that proposed generics from Teva Parenteral Medicines, a subsidiary of the No. 1 generic drugmaker by the same name, would infringe on Eli Lilly's patent for Alimta.
  Leerink analyst Seamus Fernandez says the decision removes an overhang on Lilly stock. The stock closed 2016 down 13%, though that still outperformed the broader industry. IBD's 44-company Medical-Ethical Drugs industry group plunged 25% last year.
  Lilly stock rose 2.5% in the stock market today to 77.15, again rising above its 200-day moving average support line.
  "This is also an important benefit to Lilly's long-term sales guidance of 'at least 5%' through 2020, particularly in the wake of Merck's (MRK) surprise BLA (Biologics License Agreement) for Keytruda in combination with Alimta for non-small cell lung cancer."
  IBD'S TAKE: Drug stocks tanked Wednesday after President-elect Donald Trump commented in his first post-election news conference that he views the drug industry as "disastrous" and vowed to "create new bidding procedures." Grab IBD's Industry Themes for the deep dive.
  Fernandez models $1 billion in U.S. Alimta sales in 2017. Immuno-oncology combos, like one being tested now by Bristol-Myers Squibb (BMY), could competitively pressure Lilly and Merck's IO and chemo combination, he noted.
  But analysts broadly expect Bristol-Myers' IO/IO combo to hit shelves in 2018, giving Lilly and Merck a several-month advantage. The IO plus chemo combo could also potentially be expanded to a larger range of patients.
  Meanwhile, Alimta patent litigation is ongoing in Europe, where Lilly hasn't fared as well. In 2015, a U.K. trial ended with a judge ruling that a generic chemotherapy wouldn't infringe on Lilly's Alimta patent in the U.K., France, Spain and Italy. A patent case is still unfolding in Germany.
  Fernandez estimates that $500 million to $800 million in Alimta sales are at risk in Europe. But he kept his outperform rating on Lilly stock. In midday trading on the stock market today, Lilly stock lifted 2.7%, above 77.