Cubist Pharma leaps 14% on settling Cubicin patent litigation with Teva

US drugmaker Cubist Pharmaceuticals (Nasdaq: CBST) saw its shares soar 14% to $28.90 in extending trading on April 4, after the company announced that it has entered into a license agreement with Teva Parenteral Medicines, a unit of Israel-based Teva Pharmaceutical Industries (Nasdaq: TEVA) which includes a stipulation by the parties requesting dismissal of the law suit filed by Cubist in the US District Court for the District of Delaware relating to the Abbreviated New Drug Application filed by TPM with the Food and Drug Administration (FDA) for a generic version of its antibiotic Cubicin (daptomycin for injection). Teva, however, declined 2.2% to 173.30 shekels in Tel Aviv trading.

Under the terms of the so-called pay-for-delay deal, the financial terms of which were not disclosed, Teva can launch its generic daptomycin product in the USA on June 24, 2018, if Cubist obtains a six month extension of marketing exclusivity for Cubicin under section 505A of the Food and Drug Administration Modernization Act of 1997 (pediatric exclusivity). Otherwise, Teva could launch on December 24, 2017. Teva will obtain such rights through the grant of a non-exclusive license from Cubist to Teva that would trigger on one of the dates set forth above. Cubist currently has Orange Book patents that are due to expire on September 24, 2019. In certain limited circumstances, Cubist’s license to Teva would become effective prior to the dates set forth above.

Teva will buy product from Cubist