Here's Why The Pulmatrix Inc (NASDAQ:PULM) Patent Is So Important

We like to keep our coverage varied here at Insider Financial, but now and again, markets dictate that we revisit a company almost as soon as we've taken a look at it. One such situation just presented itself with development stage biotechnology company Pulmatrix Inc (NASDAQ:PULM).We highlighted the company as one to keep an eye on earlier this week on the suggestion that it was a prime candidate for a buyout (although as some readers correctly noted, there are certain time and location related hurdles it must overcome before any buyout can take place) or, alternatively, a licensing deal with big pharma.This thesis remains firmly in place, and the company remains one to watch, but we just got news related to the company's patent portfolio, and the impact this has on our thesis (it serves to strengthen it, and we'll get into why shortly) means the company is worth revisiting briefly here.So, for those that missed our earlier coverage, this is a biotech entity that has developed a technology and is working to build a portfolio of drugs around this technology. It's called iSPERSE, and it's essentially an inhaler, but an inhaler with a difference. Current inhaler type drug technologies require a lactose blend and the drug being delivered, as a result, is basically a liquid. This brings about all sorts of problems, including inaccurate dosing, inefficient delivery of the active compound and – in many cases – compound buildup in areas that are undesirable (say, the back of the throat, for example) and the resulting buildup related complications.The iSPERSE inhaler allows for dry particle delivery, and overcomes all of the limitations commonly associated with the traditional liquid delivery system.Pulmatrix's strategy, as we've mentioned in the past, is to apply this system to therapeutic areas in which inhalable drugs are well established standards of care, but for which an improved delivery technology (the iSPERSE inhaler, for example) could improve upon said SOC.The company's chronic obstructive pulmonary disease (COPD) drug, PUR0200, and its cystic fibrosis drug, PUR1900, are examples of this strategy. But we're not here to discuss them, at least not in detail. We're here to build on our thesis using the most recent update as a base.So, what was announced?The company just reported that it has secured a European patent related to its iSPERSE delivery system. In the release, the company was relatively vague as to what the patent is actually for, outside of noting that it relates to the idea that drug delivery direct to the lungs offers advantages, but efficient delivery cannot be achieved with out dry powder, which is the core of the iSPERSE system. The abstract for the patent is available here, and it's not that detailed either, but it does offer up a data table that details the comparator points that Pulmatrix used to support its submission. For those interested, the table is below.(source)Anyway, the bottom line here is that this patent builds on patents already locked in in US and Japan, and protects the company against competitors hijacking its technology (or even better, the concept that underpins its effectiveness) in these three large markets.Outside of the obvious, this is important for another reason.Specifically, it dramatically reduces the risk that Pulmatrix is asking a partner to take on in Europe when it secures a licensing deal for the technology in any one of the indications outlined above. It would have been tough to sell rights to a CF inhaler product in Europe to a big name if the only thing that makes the CF product better than current SOC is the inhaler and delivery mechanism, but that mechanism isn’t protected. Now it is, and it is in all three major markets, Pulmatrix has increased its attraction to a distribution partner in Europe, and strengthened its side of the bargaining table when it sits down with said partner.That's why the company is running up, and we're now watching closely for any announcement that tells us who is interested in taking the product to market.We will be updating our subscribers as soon as we know more. For the latest updates on PULM, sign up below!Disclosure: We have no position in PULM and have not been compensated for this article.