N4 Pharma (LON: N4P) is up 33% today on the news about the American patent. Sure, this is very nice - but at this stage of the game a patent isn't all that exciting a thing. Simply because patents come right at the start of the testing process - not at the end when approval for marketing is perhaps going to arrive. In fact, we could say that a patent on a drug or treatment is simply the necessary first step to anything interesting. And that interesting normally arrives perhaps a decade after the patent - if it does arrive at all.
As we said about CytoMed:“But here's the thing. Patent grants come at the beginning of the drug or treatment testing process. Sure, it's great to have one - but there's no evidence this works at all yet. Because that's how the system works. Find something that might be worth testing then apply for the patent. Maybe a year later the patent will be granted. But there's still some 5 to 10 years of testing to do before anything can be put on sale. Phase I, Phase II, Phase III tests before the FDA will even look at authorisation.
The GDTC stock price reaction to this patent is as if the drug had been shown to work and was about to start producing revenue. Nope, we're at the other end of the process - the patent comes first before the testing process really starts.”
N4 Pharma share price from London Stock Exchange
Now it could be that Nuvec is going to turn out to be one of the world's best treatments. Therefore N4 Pharma will be worth a fortune. But we're years - a decade - away from even finding out whether it gets a licence to be sold as yet. Because that's just how long the testing process takes.
Yes, the American patent will make a difference but only at the end of that testing process. 33% up on something that might have a decade to go before it has an effect seems a bit much to us.