The Acrux Limited (ASX:ACR) share price has crashed 6 cents or 21.8 per cent lower to 21.5 cents after the emerging pharmaceutical company said Valeant Pharmaceuticals initiated patent litigation against Acrux regarding its generic Jublia Topical Solution, 10%.
In a statement to the ASX, Acrux said the action by Valeant is expected and formerly initiates the litigation process.
Last week, Acrux shares went ballistic after a presentation by the company said the Acrux Board viewed its topical generic portfolio as being undervalued by the market, especially given the company’s $28.5 million cash balance.
Acrux’s Jublia Topical Solution product is the most advanced of its generics. The company is seeking a licensing agreement with a large generic company who will market and sell the product in the US.
The timing of the product launch is dependent on FDA approval and the legal outcome of the patent litigation. Acrux shares are falling because of the uncertainty of the outcome of the patent challenge and the potential delay in product launch.
After the fall in the Acrux share price, the company has am enterprise value of just $18 million. Management previously said it reasonably expects there to be sufficient funding to progress the current product pipeline through to launch.