Sanofi (NYSE:SNY) and Regeneron Pharmaceuticals (NASDAQ:REGN) lose their bid to overturn a court verdict upholding two Amgen (NASDAQ:AMGN) patents covering cholesterol drug Repatha (evolocumab). Amgen sued the companies in August 2014 in an attempt to prevent them from selling rival drug Praluent (alirocumab). Both of them lower cholesterol by blocking a protein called PCSK9.

Sanofi and Regeneron lose the bid:

A federal judge on Tuesday refused to throw out court’s verdict upholding two Amgen Inc patents related to the company’s cholesterol drug (WO/2014/150983) & (WO/2016/010927) , a defeat for Sanofi SA and Regeneron Pharmaceuticals Inc, which make a rival drug.

In an October 2014 lawsuit, Amgen had sought to stop Paris-based Sanofi and Tarrytown, New York-based Regeneron from selling Praluent, a drug intended to lower bad LDL cholesterol by blocking a protein known as PCSK9.

Amgen makes a rival drug called Repatha, and it said Praluent infringed the Thousand Oaks, California-based company’s patents related to the protein. A jury found Amgen’s patents valid in March.

Court’s verdict:

Following that verdict, Sanofi and Regeneron moved for U.S. District Judge Sue Robinson, who is presiding over the case, to overturn the verdict and order a new trial. She denied that motion on Tuesday.

“The court’s latest ruling is an important step in this case and confirms the jury’s finding that the patents which protect Repatha are valid and infringed by Sanofi,” Amgen spokeswoman Kristen Davis said in an email.

Sanofi spokeswoman Ashleigh Koss said in an email that the company was disappointed with the ruling.

“It is our longstanding position that Amgen’s asserted patent claims are invalid, and we intend to appeal today’s ruling,” she said.

Regeneron, which developed Praluent in partnership with Sanofi, could not immediately be reached for comment.

Damages have yet to be set, and Robinson has not decided whether to block Sanofi and Regeneron from selling Praluent. The defendants said after the verdict that they planned to appeal to the U.S. Federal Circuit Court of Appeals, which reviews patent disputes.

Shares of Regeneron Pharmaceuticals have risen 1.2% to $384.37 at 11:03 a.m. today, while Amgen has gained 1.3% to $152.70, and Sanofi has fallen 0.4% to $40.85.

After the close of trading on 4th of jan, word spread that Regeneron Pharmaceuticals (REGN) had lost a patent case involving anti-cholesterol drug Praluent to Amgen (AMGN), yet Regenron’s shares have gained more than 1% today. Even more surprising, Amgen has gained an almost identical percent as Regeneron. What gives? Credit Suisse analyst Alethia Young and team argue that the “decision against a new trial not impactful to estimates or our base case.” They explain why:

This decision is a small headline negative, but not a driver of the ultimate legal outcome since this decision can be appealed. The injunction remains the catalyst of focus here for the case and the stock. The court ruled that they would not grant Regeneron/Sanofi (SNY) a new trial to review the jury’s decision favoring Amgen made in March. In March the jury ruled in favor of Amgen supporting the validity of their PCSK9 IP claims. Based on the jury’s decision, the judge denied Regeneron/Sanofi’s request for a new trial to rehear the evidence. In reading the court memo, it seems like the jury didn’t believe there was enough evidence to support that the middle portion of the antibody binding region was different. This would have been rare for the same judge to change decision course.

From speaking to management, appeals process will begin with no changes; they were not surprised for the judge that ruled against them to change course.