-- Pfizer's (PFE) tafamidis bench trial commencing next week shows an asymmetric upside based on modeling of three core outcome scenarios, creating a $5 billion net present value differential between bear and bull cases, RBC Capital Markets said in a Monday note.
The investment firm said the lawsuit hinges on the '441 polymorph patent that is set to expire in 2035 and is "scientifically the weakest," as the '695 compound and '696 method-of-use patents are expected to hold.
RBC estimated a 19% probability for a Pfizer win, with the company showing infringement and getting protection through 2035, representing over $6 billion in net present value.
There is a 60% probability for a tie, with generics entry from around 2032, representing net present value of over $3 billion, according to the note.
Additionally, there's a 21% probability for Pfizer losing the case and its polymorph patent is held as not infringed, translating into 2028 entry of generics, which is currently priced in the company's stock, the firm said.
RBC maintained its underperform rating on the stock with a $25 price target.
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