In January 2019, the Supreme Court denied certiorari in Amgen Inc., Amgen Manufacturing Ltd., and Amgen USA, Inc. v. Sanofi, Aventisub LLC, Regeneron Pharmaceuticals, Inc., and Sanofi-Avantis U.S., LLC, a case that asked the Court to review the law related to the written description requirement of 35 USC Section 112. We previously discussed the case here. This case arose when Amgen sued Sanofi and Regeneron, alleging that their monoclonal antibody product, Praluent® (alirocumab), infringed Amgen’s patents. In ruling on the case, the Federal Circuit (872 F.3d 1367, Fed. Cir. 2017, “Sanofi”) essentially overturned the “well characterized antigen” test, which allowed an antibody product to be described by the antigen that it binds, and held that in order to obtain broad patent coverage for a class of antibodies that bind to a particular antigen and perform a particular function, companies must disclose a sufficient number of representative antibodies across the claimed genus or establish a clear relationship between the function of the antibody and the genus of the antibody in their specification. In essence, the Federal Circuit’s decision in Sanofi raised the bar for protecting antibody inventions by requiring more data when disclosing and claiming antibodies. The Supreme Court’s refusal to review the Federal Circuit decision means that the standard for obtaining broad protections for therapeutic monoclonal antibodies will continue to be challenging.
In view of the Federal Circuit’s holding in Sanofi, the question becomes: how can a company build a patent portfolio that can withstand invalidation under Sanofi and withstand other challenges? The answer is: by building a multi-layered portfolio offering many different layers of protection.
A great example of a patent portfolio with many layers, creating a so-called “patent thicket,” is the patent portfolio protecting Humira®, also an antibody. Despite the challenges and invalidations of one of Humira’s core patents (the ‘135 patent) over the summer of 2017, no competitor can market a biosimilar of Humira in the US until at least 2023. This is because Humira® is protected by more than 110 patents, some of which extend its patent term all the way to 2034. Humira’s portfolio is so robust that several biosimilar manufactures have entered into settlement agreements with Abbvie that would delay the U.S. launch of a Humira®-based biosimilar product until 2023 rather than litigate the patents. While 2023 cuts Humira’s patent market exclusivity by more than a decade, Abbvie can still market Humira without competition more than five years beyond the expiration of the ‘135 patent, the patent that was invalidated by the PTAB.
The strength of Humira’s patent portfolio comes from several aspects. First, it is big. There are more than 110 patents protecting various aspects of the drug. Such a large portfolio is designed to continue standing even if a few patents may be invalidated.
Second, Humira’s portfolio is also very diverse. In a presentation in October 2015 entitled “Broad U.S. Humira Patent Estate”, Abbvie outlined its strategy: to cover every aspect of the drug. Abbvie listed 22 patents for various diseases or methods of treatment, 14 on the drug’s formulation, 24 on its manufacturing practices, and 15 “other” patents.
Third, Humira’s portfolio is staggered. By not filing all the patent applications at one time, Abbvie was able to extend Humira’s patent term to 2034, 16 years past the initial expiration of the primary patents in 2018.
Of course, it should be mentioned that a portfolio like Humira’s comes with a very steep price tag and not all companies are in the position to invest that much into patent protection. Nevertheless, creating layers within the portfolio as well as within each patent can greatly enhance the chances that at least some patents and claims will remain valid despite challenges and even changes to the laws.
For antibody patents, this can be done in several ways. First, each patent should claim the subject matter using several different formats yielding differences in scope so that even if some claims are invalidated in a post-grant challenge, other claims within the same patent still remain valid. Let us examine functional claims, for instance. Although functional claims directed solely to antigen binding are likely invalid under Sanofi, claiming by function should not entirely be ignored. Instead such claims can be strengthened by adding backup claims, including a set of narrower claims that include parts of the antibody sequence or other features of the antibody that have a greater chance of withstanding a challenge. Including one or two backup claim sets could thus increase the chances that the entire patent is not invalidated in a challenge. Further, functional elements could be combined with structural elements in the same claim, creating hybrid claims as well.
In addition to including multiple layers of claims within each patent application, the portfolio should also be chronologically staggered to include a range of different patent claims that act to extend the patent term. In the antibody space, there are several different types of claims available to developers of therapeutic antibodies. These include sequence claims, pharmaceutical composition claims, function claims, methods of treatment, and antibody-conjugate claims. To build a strong patent portfolio, each of these patent claims can be utilized at different points in the development process. For instance, the core patent could be a composition patent directed to the complimentarity determining region (CDR) sequences of the actual antibody. Later, claims directed to methods of treatment, compositions, and antibody-conjugates (if applicable) can be included. These later filed patents would serve to extend the patent life of the antibody beyond the expiration of the core composition patent.
Patenting antibodies has become more challenging in the wake of the Federal Circuit’s decision in Sanofi. When patenting antibodies, it is now more important to review each antibody on a case-by-case basis and decide which features to claim, and how best to claim them, based on the amount of data and investment available. By taking advantage of the different types of patents claims that are available for antibodies and by including backup claims in the form of layering, a company can increase the likelihood that at least some of the claims will remain patentable when the patent is subject to invalidation.
On Monday, February 11, 2019, the US Patent Trial and Appeals Board (PTAB) denied Dr. Reddy’s petition requesting institution of inter partes review (IPR) of Celgene’s myelodysplastic syndromes (MDS) patents (IPR2018-01504, IPR2018-01507, IPR2018-01509). This is the latest development in a dispute that has garnered much attention since Bristol Myers Squibb (BMS) announced last month that it planned to acquire Celgene in a deal valued at $74 billion. The question now is how does Dr. Reddy’s loss at the PTAB change Dr. Reddy’s overall strategy and outlook? The short answer is that while Dr. Reddy’s best-case scenario is likely off the table, little else has changed.
We previously wrote about the Celgene/Dr. Reddy’s dispute here. At the heart of the dispute is Celgene’s Revlimid®, a derivative of thalidomide (lenalidomide) used to multiple myeloma (MM), transfusion-dependent anemia due to myelodysplastic syndromes (MDS), and mantel cell lymphoma. Many patents protect Revlimid®, including a composition of matter patent covering lenalidomide (U.S. Patent No. 5,635,517) which expires in October 2019, method-of-use patents which expire by 2023, and two polymorph patents, including U.S. Patent Nos. 7,855,217 and 7,465,800, which do not expire until 2024 and 2027, respectively. Revlimid’s® long-term value thus stems from these two polymorph patents.
Dr. Reddy’s ability to get onto the market before 2023 depends on its ability to get around the patents, mainly the polymorph patents. To do this, Dr. Reddy’s is suing Celgene in district court litigation over the two polymorph patents and five patents directed at treating MM. With regards to the polymorph patents, Dr. Reddy’s will argue that is does not infringe those patents because its generic product is “amorphous” lenalidomide, whereas the patents are limited to “crystalline” lenalidomide. Dr. Reddy’s thus believes it can circumvent the polymorph patents.
The case is currently in the discovery phase with discovery ending this month or next, and then the case will presumably move on to trial later this year. We probably will not see a decision from the court before Q4 2019 or even Q1 2020. If there is an appeal, that will typically take a year, which means that a final decision could be expected in early 2021.
So now the question is how did the IPR factor into all this. Dr. Reddy’s chose to challenge three MDS patents through an IPR. This included U.S. Patent Nos. 9,056,120; 8,404,717; and 7,189,740. Dr. Reddy’s did not challenge the MM patents or the polymorph patents in this way possibly because: (a) IPRs are limited to Section 102 and Section 103 issues, whereas Dr. Reddy’s appears to be arguing that its product does not infringe, and (b) a win on invalidity in an IPR would open the door for other generics to launch their products, whereas a win on non-infringement in a district court litigation would keep other generics off the market. If Dr. Reddy’s had the IPRs instituted in February 2019, a final written decision would have been expected in February 2020, and an appeal of that decision would add another year to about February 2021. If Dr. Reddy’s managed to win the IPR and also win on the two polymorph patents, then it could enter the market with respect to MDS in early 2021. Even though MDS is a smaller indication than MM, Dr. Reddy’s product could still slowly eat into Celgene’s MM profits through off-label use.
Since the IPRs were not instituted, and the hurdle to appealing the denial is high especially in light of recent case law, Dr. Reddy’s has lost a valuable opportunity to enter the MDS market early. However, not all is lost. If Dr. Reddy’s prevails in showing non-infringement of the two polymorph patents by early 2021, then it just needs to wait until the method-of-use patents expire to enter. While Natco’s agreement allows it to enter the market with a limited supply in March 2022, Dr. Reddy’s will be able to enter with a full supply as soon as the patents expire. Revlimid®’s longevity assumes that no generic will fully enter before 2026 but Dr. Reddy’s will be able to do just that if it prevails at trial on the non-infringement issue.
The next major question is whether this IPR result, or lack thereof, will impact any settlement discussion between the parties. Settlements are almost always business decisions. To date, Celgene and Dr. Reddy’s have not been able to resolve their differences, likely due, in part, to Celgene’s prior settlement agreement with Natco, which limits what Celgene can offer Dr. Reddy’s. From Celgene’s perspective, they are likely to argue that because they “won” in the IPR setting where the bar is lower, they have a stronger hand. This, however, ignores the fact that different issues will be disputed in the litigation. Dr. Reddy’s will still argue that their generic does not infringe and that has not changed with the IPR result.
We will continue following this case and will keep you informed of any new developments.
On February 6, 2019, the US Patent Trial and Appeal Board (PTAB) announced that it has instituted Mylan Pharmaceuticals, Inc.’s inter partes review (IPR) proceeding against Biogen MA Inc’s multiple sclerosis drug, Tecfidera® (IPR2018-01403). Tecfidera® sales exceed $4 billion a year and account for nearly 48% of Biogen’s sales, but there are now questions about its long-term value since it may face generic competition sooner than expected.
The focus of the IPR is on U.S. Patent No. 8,399,514 (the ‘514 patent) which is directed to a method of treating multiple sclerosis in a subject by administering a specific daily dosage, namely 480 mg, of fumarates, specifically dimethyl fumarate (DMF) and/or monomethyl fumarate (MMF). Claim 1 below is reproduced below:
1. A method of treating a subject in need of treatment for multiple sclerosis comprising orally administering to the subject in need thereof a pharmaceutical composition consisting essentially of
(a) a therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof, and
(b) one or more pharmaceutically acceptable excipients, wherein the therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof is about 480 mg per day.
The IPR will focus specifically on the 480 mg per day dosage amount. To win, Mylan will have to prove that it would have been obvious to one skilled in the art to administer a dosage of 480 mg per day. Biogen has already shown that a 720 mg dose was efficacious but a 320 mg dose was not statistically significant. Biogen has previously argued that the magnitude of the clinical efficacy of the 480 mg dose was unexpected and therefore, not obvious. Therefore, a key issue is whether it would have been obvious to a person of ordinary skill in the art to optimize the effective dose and arrive at a dosage of 480 mg per day.
The ‘514 patent is at the heart of the Tecfidera® patent portfolio because it has an expiration date of 2028. Other patents protecting Tecfidera® have expiration dates in April 2019, October 2019, and June 2020, according to the Orange Book. The ‘514 patent is, therefore, critical to protecting Tecfidera’s long-term value beyond 2020.
The new IPR, however, threatens that long-term value. A final decision in an IPR is typically announced 12 months after the IPR has been instituted. In this case, it means that we will probably have a final decision around February of 2020, not accounting for any appeals. If Mylan wins the IPR, it would have to wait until at least the June 2020 patent expires before launching a generic competitor drug. Again, this does not account for any appeals in the IPR. Nevertheless, the earliest possible launch for Mylan could occur in June 2020 which significantly cuts into Tecfidera’s market exclusivity.
The important question now is whether the ‘514 patent can withstand an IPR challenge by Mylan Pharmaceuticals, Inc. While Biogen’s stock dropped more than 7% when it was announced that the IPR was instituted, just because an IPR is instituted by the PTAB does not necessarily mean that a patent will be revoked. Around 60% of petitions are instituted in the pharma space. Once instituted, the likelihood that a patent claim will be cancelled is around 46%, which is a lower percentage compared with other technological areas.
Moreover, the ‘514 patent has already faced an IPR and won. In 2017 it successfully overcame a challenge from Kyle Bass and the Coalition for Affordable Drugs (IPR2015-01993). That IPR was also based on a Section 103 obviousness argument. In that IPR, the PTAB held that the petitioner failed to present any evidence that refuted Biogen’s claims that the magnitude of the clinical efficacy of the 480 mg dose was unexpected and thus, not obvious.
While the new Mylan IPR will also rely on prior art to prove whether the 480 mg dose was obvious or not, Mylan relies on at least one new prior art reference, Schimrigk 2004. The new reference, according to Mylan, shows that “doses of 720 mg/day, 360 mg/day, and those in between, such as 480 mg/day, were likely to be efficacious to treat MS.” In instituting the IPR, the PTAB acknowledged that there was a factual dispute regarding whether Schimrigk 2004 does in fact establish efficacy at 360 mg/day but decided to leave that question for trial. Also to be determined in the IPR will be the question of whether knowledge of efficacy of dimethyl fumerate (DMF) for the treatment of MS at the 720 mg/day dose and/or 360 mg/day dose would have provided sufficient motivation to a person of ordinary skill in the art to optimize the dose of DMF in the treatment of MS and arrive at a 480 mg dose.
Whether Mylan can succeed where the Coalition of Affordable Drugs has failed remains to be seen. We will keep you informed of any new developments in this case.
On January 22, 2019 the Supreme Court affirmed the Federal Circuit’s ruling in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. (“Helsinn”) that a secret sale qualifies as prior art under the under the America Invents Act (AIA). The question in this case was whether an inventor’s sale of an invention to a third party qualifies as prior art for purposes of determining patentability under the AIA even though that third party was obligated to keep the invention confidential pursuant to a non-disclosure or confidentiality agreement. By affirming the Federal Circuit’s holding that secret sales do qualify as prior art under the AIA, Helsinn emphasizes the importance of filing patent applications before engaging in any type of activities that may constitute a sale.
As way of background, Helsinn Healthcare S.A. and MGI Pharma, Inc. entered into two agreements in 2001 regarding Helsinn’s palonosetron pharmaceutical product, a drug used in the prevention and treatment of chemotherapy-induced nausea and vomiting. In the first agreement, a license agreement, MGI agreed to distribute, promote, market, and sell Helsinn’s palonosetron product. In the second agreement, a supply and purchase agreement, MGI agreed to purchase exclusively from Helsinn any palonosetron product approved by the US Food and Drug Administration (FDA). While both agreements were disclosed publicly in press releases and Form 8-K filings, none of those disclosures mentioned specifics about the product, including its dosage formulations. Two years later, Helsinn filed provisional patent applications covering the product that ultimately resulted in patent protection for the formulation, including U.S. 8,598,219.
In 2011, Teva Pharmaceutical sought FDA approval to sell a generic version of Helsinn’s palonosetron product. In the Hatch-Waxman litigation that ensued, Teva argued that Helsinn’s patent was invalid because the invention was “on sale” more than a year before the first provisional patent application was filed through the Helsinn-MGI agreements.
The district court rejected Teva’s invalidity argument, holding that the post-AIA on-sale bar “requires that the sale or offer for sale make the claimed invention available to the public.” In the district court’s view, the invention was not on sale in the Helsinn-MGI agreements because it was not available to the public.
The Federal Circuit, however, reversed. In doing so, it rejected the requirement that specific details of the invention be disclosed publicly for it to constitute a sale.
The Supreme Court sided with the Federal Circuit, holding that a sale of an invention to a third party can qualify as prior art under § 102(a) even if that third party is required to keep the invention confidential. In doing do, the Supreme Court rejected the argument that Congress excluded secret sales from the on-sale bar in enacting the AIA, and found instead that “[t]he addition of ‘or otherwise available to the public’ is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale.’”
The biggest take-away from Helsinn is that it emphasizes the importance filing patent applications early and not only relying on a confidentiality agreement when entering into discussions with a potential party. These patent applications should be filed before any sort of public disclosure or other patent-invalidating activities that constitute an offer for sale, such as a license agreement or supply agreement, or which may later be found to constitute an offer for sale, take place. Even early stage companies that have not fully committed to a final product should file a provisional patent application prior to entering into discussions with a potential partner. That provisional patent application can provide the company with an earlier filing date, but also importantly, it can protect the product from possible patent invalidation down the road.
Earlier this month the U.S Supreme Court denied certiorari in Amgen Inc., Amgen Manufacturing Ltd., and Amgen USA, Inc. v. Sanofi, Aventisub LLC, Regeneron Pharmaceuticals, Inc., and Sanofi-Avantis U.S., LLC, a case that asked the Court to review the law related to the written description requirement of 35 USC Section 112. This case arose when Amgen sued Sanofi and Regeneron, alleging that their monoclonal antibody product, Praluent® (alirocumab), infringed Amgen’s patents (U.S. Patent Nos. 8,829,165 and 8,859,741). Amgen owns and commercially markets a competitor product named Repatha® (evolocumab). The Supreme Court’s refusal to review the case means that the Federal Circuit decision (872 F.3d 1367, Fed. Cir. 2017, “Sanofi”) will stand and the standard for obtaining broad protections for therapeutic monoclonal antibodies will continue to be challenging.
In Sanofi, the Federal Circuit ruled on October 5, 2017 that in order to obtain broad patent coverage for a class of antibodies that bind to a particular antigen and perform a particular function, companies must disclose a sufficient number of representative antibodies across the claimed genus or establish a clear relationship between the function of the antibody and the genus of the antibody in their specification. In doing so, the Federal Circuit essentially overturned the "newly characterized antigen" test and raised the bar for protecting antibody inventions by requiring more data when disclosing and claiming antibodies.
In Sanofi, the claims were directed to a monoclonal antibody that bound to one or more of 15 different amino acid residues on the sequence of the target antigen and performed a certain function (e.g., blocked the antigen from binding to its target). Claim 1 of U.S. Patent No. 8,829,165 ("'165 patent") is representative. It recites:
“An isolated monoclonal antibody, wherein, when bound to PCSK9, the monoclonal antibody binds to at least one of the following residues: S153, I154, P155, R194, D238, A239, I369, S372, D374, C375, T377, C378, F379, V380, or S381 of SEQ ID NO:3, and wherein the monoclonal antibody blocks binding of PCSK9 to LDL[-]R.”
To support its claim that antibodies that bound one of the 15 residues or any combination of them were covered by the patent, Amgen disclosed two specific antibodies with binding data and affinity data. These data probably would have been sufficient to support the claims prior to Sanofi. In Sanofi, however, the Federal Circuit ruled that such disclosure was insufficient. The court noted that patent specifications must disclose a “representative number” of species of the genus of claimed antibodies in order satisfy the written description requirement. The Federal Circuit did not, however, provide any guidance as to what a “representative number” of species would be. Therefore, it still remains an open question as to what counts as a representative number of species remains today.
While obtaining protection for antibodies is still possible after the Federal Circuit’s decision in Sanofi, certain types of claims are now more susceptible to attack and possible invalidation. We previously reviewed several different types of patent claims that are available to protect antibody inventions and their relative strengths in the wake of Sanofi. Each of the most common types of antibody claims is discussed again below.
Historically, one of the broadest types of claims a company could obtain in an issued patent directed to an antibody was claims describing the antibody by its function. Functional claims to a genus of antibodies typically recite the functional property of an antibody without reciting any structural or sequence information, for example “an antibody that specifically binds to target Y”. Similarly, functional claims can be in the form of competition claims where “an antibody that competes with antibody X for binding to antigen Y” is covered. While such broad claims can cover nearly any antibody in a group of antibody products that are directed to the same target, such functional claims are becoming increasingly vulnerable in light of Sanofi, as US courts will now require a “representative number” of examples of the genus of claimed antibodies, i.e. a representative number of antibody sequences and associated binding data.
Method of Use/Treatment
Claims directed to the method of use or method of treatment have also proven to be vulnerable as these types of claims have not fared well when challenged in an Inter Partes Review (IPR) at the Patent Trial and Appeal Board (PTAB). These types of claims are by far the most popular target of IPR petitioners. In a study of antibody-related IPR petitions, the IPR petition grant rate on method of treatment claims is 65% (24 petitions granted, 13 denied), but, in all 6 of the Final Written Decisions to date, all instituted claims were held unpatentable. Therefore, it appears that if the PTAB institutes an IPR on a method of treatment antibody claim, those claims are more likely than not to be found unpatentable. One potential reason for why these types of claims are relatively easy to invalidate is because if you knew the antigen and what it does, it would be obvious to develop an antibody against that antigen to treat people. As such, method of use and method of treatment claims are probably the weakest types of claims for protecting antibodies.
On the opposite side are composition claims directed to the chemical structure of the antibody. These types of claims define an antibody by its six complementary determining regions (CDRs), by its two variable regions, or even by its heavy and light chain sequences (both cDNA and peptide sequences). Patent prosecutors keen on obtaining the most protection for clients will attempt to claim sequences by the shortest and fewest number of sequences possible. Often times the amount of sequence data needed to pass examination hurdles will depend on which U.S. Patent and Trademark Office examiner has been assigned to prosecute the application. These types of claims will likely survive invalidation attempts due to their precise definition of the chemical structure of the antibody, leaving little question regarding which antibodies might be encompassed by the claims and which may not be encompassed. However, while antibody sequence claims are a strong type of claim to have, in terms of claim scope they are also the narrowest option, which makes them easier for a competitor to design around.
Besides claiming the antibody itself, a company can claim a pharmaceutical composition or formulation. While these types of claims are theoretically easier to design around because they include the antibody structure, they also appear to be successful in surviving IPR challenges at the PTAB. In fact, the PTAB rarely institutes challenges to composition claims, and when it has, the claims almost always survive. Antibody formulation claims are the second most frequently challenged type of antibody claim behind method of treatment claims, discussed above. However, of the 13 IPRs that have been filed against claims to antibody formulations, three were instituted and 10 were denied. In the three instituted IPRs, all of the claims survived the challenge. Of the IPR petitions that were denied, most were denied because the petitioner failed to establish “a reasonable likelihood that the petitioner would prevail.” It is likely that these types of claims survive challenges because there is high unpredictability in the art since even small changes in antibody formulations can have unexpected effects on protein aggregation, viscosity, and other factors, making it harder to prove that such formulations are predictable and obvious. As such, pharmaceutical formulation patent are important to include when deciding how to protect antibodies.
A final type of claim for protecting an antibody a claim directed to an antibody conjugate. These types of antibody claims describe an antibody with a particular sequence fused to, or conjugated to, a drug. In an IPR challenge to Kadcyla®, an antibody-drug conjugate consisting of the monoclonal antibody trastuzumab, Herceptin®, linked to the cytotoxic agent emtansine, the PTAB ultimately upheld the claims because a person skilled in the art at the time of the invention would have expected Herceptin®-maytansinoid immunoconjugates to be unacceptably toxic. While claims to antibody conjugates may survive obviousness challenges, it is important to remember that they are also relatively narrower tan other antibody claims because they describe both the antibody sequence and a conjugated drug. Such claims will also likely face challenges as to how much data and support is required to be in the specification to broadly claim the antibody conjugate and variants thereof. Nevertheless, these types of claims may be valuable to an antibody patent portfolio.
The recent case law in the antibody space has made it more challenging for companies to obtain broad protections for antibodies, especially in the wake of the Federal Circuit’s Sanofi decision and the Supreme Court’s refusal to review that decision. When patenting antibodies, therefore, it is important to review the antibodies on a case-by-case basis and decide which features to claim based on the amount of data and investment available. A patent portfolio can be more valuable when including many different types of claims directed to the antibody and its uses. However, by including at least some claims narrowly tailored to the data available for the antibody, a company can increase the likelihood that the at least some of these claims will be patentable and reduce the chances that at least these claims will be invalidated.
I recently wrote about my experiences teaching a course, Intellectual Property and Healthcare Technologies, at Cornell Law School. I received a lot of questions and comments about that post so I decided to write a follow up with a few more lessons that I learned while teaching at Cornell Law. I hope these lessons can teach both instructors and students (after all, aren’t we all students?) about what worked for me and how some of these lessons can be incorporated into presentations, written materials, and even daily practices.
First, the benefit of collaborations cannot be understated. As I previously mentioned, since my course at Cornell was longer than my course at Harvard, I had the opportunity to expand the subject matter that I taught. To help teach some of the new topics, I engaged experts from the field to help lead the class discussions. In particular, I invited Michael Carrier, a leading expert in pharmaceutical antitrust law and Distinguished Professor at Rutgers Law School, and Joe Fuhrer Jr., Professor Emeritus of Economics Widener University, to teach classes on antitrust and drug pricing, respectively. Not only did I get to know these two professionals better by inviting and hearing them lecturer, but so did the students. Networking is an important part of almost any job, especially in business and law, and the students and I both benefited from having these experts present.
Second, working with students throughout the semester resulted in better final papers. I know many people like to procrastinate when writing their papers, whether it be a final paper for a class, a brief, an agreement, or even a patent application. I know I certainly did. The lesson I learned, however, is that the students who started outlining and writing their papers and submitted their papers to me for comments early on in the semester were the ones who ended up producing the better papers. Rarely is anything you write perfect the first time around. To produce your best possible product, you have to start early, receive feedback (whether from a teacher, a colleague, or a client), and implement the necessary changes to take your paper to the next level.
Third, examples, example, examples! The life science industry is certainly filled with examples on any given topic, particularly when it comes to drugs and the controversies surrounding them. One of the biggest improvements I made to my slides this year was adding more real-life examples. If we talked about building a diverse patent portfolio, we looked at Humira® and the 100+ patents protecting that drug. If we talked about antitrust, we examined the current case surrounding Remicade®and allegations of inappropriate rebates and bundling. If we talked about potential legislative reforms to the brand and generic/biosimilar dynamic, we evaluated recent proposals by Congress, the FDA, and the Trump administration. I also encouraged students to include specific case studies and examples in their papers to better illustrate the points they were trying to make. Providing examples not only puts concepts into perspective, it also makes presentations and papers more engaging.
Fourth, I encouraged students to publish their works. As mentioned in my first point, networking is a very important part of one’s job in business and law. Another part of the job is getting your name out there and being recognized. One great way of doing that is to write and publish your work. When I first started practicing, I was fortunate enough to work with partners who really valued the benefit of publishing legal articles whether it be in newspapers, magazines, or business journals. As a result, I got into a habit of writing and publishing my work. Many of my speaking opportunities down the road and clients that I engaged came because someone read something that I wrote. Since my class was a writing class and students had to write a paper, I also wanted to encourage them to try to get their papers published. By publishing their papers, not only are the students be able to add a publication to their resumes, but they also start getting their names out there.
Finally, take any opportunity you can find for personal and professional growth. Since I had to drive every week to and from Cornell (about an hour and forty-five minutes each way), I spent a lot of time in the car by myself. I took this time to listen to audiobooks through Audible. In fact, the best thing I did for myself last year was to invest in Audible. I listened to everything from negotiation books such as Never Split the Difference, to personal development books such as The Power of Habit, to fun books like Crazy Rich Asians. I admittedly did not achieve many of the professional goals I had set for myself for 2018, but I did achieve my goal of reading (or listening to) at least 60 books in 2018! I have a whole list of books that I can highly recommend if anyone is interested. Time alone in a car is not only a good time for reflection, but also a good time to consume information. Listening to audiobooks was a great way for me to learn a lot of new content while also making my drive more enjoyable.
I hope you enjoyed learning from my experiences. Please feel free to reach out with any questions or comments.
Last week Bristol Myers Squibb (BMS) announced that it planned to acquire Celgene in a deal valued at $74 billion. Following the acquisition, the resulting company will have nine products in its portfolio that each generate more than $1 billion a year. This portfolio will include Celgene’s Revlimid®, a derivative of thalidomide (lenalidomide) used to multiple myeloma (MM), transfusion-dependent anemia due to myelodysplastic syndromes (MDS), and mantel cell lymphoma. Revlimid® sales exceeded $8 billion in 2017, but there are questions surrounding its long-term value since it may face generic competition in 2022 by Dr. Reddy’s.
A settlement conference is scheduled for tomorrow, January 10, 2019, in the Hatch-Waxman patent case between Celgene and Dr. Reddy’s. To date, the parties have not been able to reach a settlement. However, this may now change with Bristol Myers at the table.
Celgene has many patents protecting Revlimid®, including a composition of matter patent covering lenalidomide (U.S. Patent No. 5,635,517) which expires in October 2019. The other patents mainly fall into two categories: method-of-use or indication patents and polymorph patents. The method-of-use patents mostly expire by 2023 but the polymorph patents, including U.S. Patent Nos. 7,855,217 and 7,465,800, do not expire until 2024 and 2027, respectively. Revlimid’s® long-term value thus stems from these polymorph patents which look to extend Revlimid’s® monopoly past 2022.
In terms of generic competition, Celgene faced an early threat from Natco back in 2010, which ended in a settlement in 2014 that would allow Natco to enter the market with a limited quantity of product in 2022 and gradually increasing to an unlimited quality in 2026. At least according to this settlement, the generic cliff for Revlimid® would not fully be 2022, but rather 2026. This agreement most likely includes, although we have not been able to verify through public documents, an acceleration or most-favored-nation provision that would allow Natco to enter the market sooner if a subsequent generic was able to obtain a better entry date.
Since Natco, several other companies have filed ANDA’s against Revlimid®, including Dr. Reddy’s, Zydus, Cipla, and Lotus Pharmaceuticals. The case with Dr. Reddy’s is the furthest along. Although a trial date has not yet been scheduled, it would likely take place in the second or third quarter of 2019, as the parties have thus far been engaging in discovery.
The trial will likely focus on the polymorph patents and Dr. Reddy’s argument that is does not infringe those patents because its generic product is “amorphous” lenalidomide, whereas the patents are limited to “crystalline” lenalidomide. Dr. Reddy’s thus believes it can circumvent the polymorph patents. Celgene, on the other hand, will likely argue that even though Dr. Reddy’s product is amorphous at certain stages, it is also crystalline at others. There is at least some support for this type of argument as the Federal Circuit suggested in a 1994 case (Zenith Laboratories, Inc. v. Bristol-Myers Squibb Co.) that a drug that is not infringing when made or sold, but converted into a patented polymorph when ingested, may be infringing.
Another possible venue for challenging the polymorph patents would be through an inter partes review (IPR) proceeding. Dr. Reddy’s, however, chose not to challenge the polymorph patents that way, focusing instead on challenging three MDS patents which expire in 2022. There are two potential reasons why Dr. Reddy’s chose not to challenge the polymorph patents through an IPR. First, IPR challenges are limited to Section 102 and Section 103 issues, meaning that you are challenging the validity of those patents. Dr. Reddy’s appears to be arguing that its product does not infringe, which is not an appropriate argument for an IPR. Second, if Dr. Reddy’s were to challenge the polymorph patents in an IPR and win, then it would open the door for other generics to launch their products. By arguing non-infringement in a district court litigation rather than invalidity in an IPR, Dr. Reddy’s can keep other generics off the market.
To date, Celegene and Dr. Reddy’s have not been able to resolve their differences and it appears as though they are headed for trial. One main obstacle to settlement has been Celgene’s prior settlement agreement with Natco, which limits what Celgene can offer Dr. Reddy’s.
Nevertheless, Dr. Reddy’s probably wants to beat Natco to the market. If Dr. Reddy’s can successfully show non-infringement of the polymorph patents, and wait for the expiration of the other patents, then it could enter the market with an unlimited quantity by 2022. This would be a better outcome than the one that Natco received.
BMS’s presence at the table may change the dynamics of any potential settlement. While Celgene may not have had the ability or the economics to broker a settlement, the new BMS/Celgene entity with its new product pipeline and business model just may.
We will keep you informed of any new developments following the January 10 settlement conference.
With the JP Morgan Healthcare Conference taking place this week in San Francisco, we thought it would be worth looking at the issues that biotech companies need to remember about intellectual property (IP) when pitching to investors. At BioPharma Law Group, we help our clients prepare and finetune their presentations to investors, and we also act as judges in startups competitions. Based on these experiences, we provide below a list of IP issues that start-ups should keep at the top of their mind when making an investor pitch.
First, know your own IP. Make sure you are familiar with your patent portfolio and know exactly which patent applications you have filed, where they stand in prosecution, and who owns them. If you are licensing IP from somewhere else, whether it be a university or other company, be prepared to discuss whether your license is exclusive or not. If the technology involves core IP, and your license is not exclusive, you may have to explain why you think you do not need an exclusive license. Moreover, know the scope of your patents. Be prepared to talk about at least your main claims and how they cover the product that you are trying to develop and eventually market. If your claims do not cover the product, be prepared to discuss why and what you can do to improve them. This may include strategies for filing continuation applications or follow on applications to yield the desired claim scope.
Second, know proper IP terminology. Do not say that you have a “patent” when in fact you only have a patent application on file. Patent terminology can be difficult for the lay person. Practitioners such as us do not always appreciate this fact since we deal with patents and patent applications on a daily basis, but we cannot emphasize enough the importance of accurately and properly discussing your IP. Investors know IP terminology and using improper terminology will not only confuse the investors, but it could also reduce the value of your technology in their eyes or give the impression that the start-up is not really ready for investment. Saying that you have an “international patent in many countries” can mean a variety of things, or it can mean nothing at all. Work with your company’s IP counsel to make sure you understand what you actually have in your IP portfolio and what you need to focus on in your presentation.
Third, know your competitor IP. Unless you discovered some groundbreaking technology, chances are you have competitors. Every company looking for investors has IP competition. Be prepared to discuss your competitors, their IP (i.e. the patent landscape for your market), and what your company’s strategy is for steering around any IP landmines. This may include plans for licensing certain competitor IP or designing around it.
Fourth, know your company IP strategy. Have an IP strategic plan. Investors do not expect you to have dozens of patent applications already filed but they do expect you to be able to tell them how you plan on building on what you already have and avoiding known patent threats in your target market. Further, any strategic plan should include cost estimates and ballparks for patent applications you plan to file in the future and where you plan to file them and why. Other key components include fleshing out whether your company will be filing on a platform technology, improvements on established technology, or new embodiments of technology. Your company may also need to license or acquire certain IP already existing in your field to bring your product to market. Be prepared to discuss how and when you plan on accomplishing that goal.
Finally, know the current patent and regulatory environment and how it may impact your strategic IP plan. Depending on your specific technology, the current patent climate may have significant implications on your ability to get the claims you want. Top of the list of issues today include 35 U.S.C. Section 101 subject matter issues and 35 U.S.C. Section 112 written description issues. If you are developing biologics, the current climate favoring biosimilars and generic drugs may be problematic for you. If your technology falls within the types that may be affected by today’s uncertain patent and regulatory climates, be prepared to discuss how you plan on mitigating that risk and what backup positions you might pursue.
Good luck to everyone participating in JP Morgan this week!
I recently concluded my first semester of teaching my course Intellectual Property and Healthcare Technologies at Cornell Law School. This was not my first time teaching the course. In fact, I have taught it six previous semesters at the Harvard School of Public Health. However, in the seven semesters that I have taught the class, I am always amazed by what I learn, both from the course material and from the students. Below are five lessons that I learned from teaching my course this semester.
Overall, I really enjoyed teaching my class at Cornell. I hope to take some of the lessons learned from this semester to make the class even more informative and valuable next year.
On December 4, 2018, the District Court for the Eastern District of Pennsylvania again denied Johnson & Johnson and Janssen’s (“J&J”) motion to dismiss antitrust claims regarding sales of its blockbuster biologics, Remicade. In this case, retailers Walgreens and Kroger are suing on behalf of themselves and as the assignees of AmerisourceBergen Drug Corporation and Cardinal Health, Inc., respectively, who are pharmaceutical wholesalers that directly purchased Remicade from J&J for resale to Walgreens and Kroger. Walgreens and Kroger allege antitrust injury because they pay higher prices for Remicade as a result of J&J’s “Biosimilar Readiness Plan,” which involves exclusive agreements and rebate bundling with insurers and health care providers and prevents lower-priced biosimilar versions of Remicade to compete.
J&J moved to dismiss the claims on two grounds. First, J&J argued that the retailers lacked antitrust standing because they do not have consent from the distributors to pursue these claims, as may be required under their distributor agreements. To consider whether the retailers have antitrust standing and whether the distributor agreement encompasses their antitrust claims, the Court decided that it will have to interpret the agreements. To this end, the Court converted J&J’s motion to one for summary judgment and agreed to hear additional evidence.
Second, J&J argued that the retailers failed to sufficiently allege antitrust injury. J&J’s primary argument was that the retailers failed “to plead specific facts showing that Pfizer and Merck were excluded from competing in the infliximab market by Defendants’ Biosimilar Readiness Plan, rather than choosing not to compete.” In this regard, the Court denied the motion, finding that J&J’s Biosimilar Readiness Plan foreclosed lower priced biosimilar infliximab drugs from competing with Remicade and resulted in retailers paying “inflated prices for those products.”
This is the second time that the Pennsylvania Court has denied J&J’s motion to dismiss a lawsuit dealing with Remicade. We previously wrote that on August 10, 2018, the Court denied J&J’s motion to dismiss Pfizer’s antitrust lawsuit relating to its biosimilar, Inflectra. In that case, Pfizer sued J&J alleging that J&J has been conducting “anti-competitive practices,” such as forcing hospitals and insurers to enter exclusive arrangements and bundled rebate programs, to prevent biosimilar competition by preventing health insurers, hospitals, and clinics from offering Pfizer's lower-priced biosimilar product.
The results of these antitrust cases will be important for companies developing innovator and biosimilar products alike as these cases will likely provide more insights on which pricing practices are permissible under antitrust laws and which are not. We will continue to monitor the case and provide updates as they become available.
BioPharma Law Blog posts updates and analyses on IP topics, FDA regulatory issues, emerging legal developments, and other news in the constantly evolving world of biotech, pharma, and medical devices.