Innovators Employ Labyrinthine Defenses To Fend Off Biosimilars
Executive Summary
Innovators are using increasingly complicated tactics in the high-stakes game of keeping biosimilars at bay to ensure their brand-name medicines can keep hauling in the cash for as long as possible.
In the high-stakes game of defending blockbuster biologics from biosimilar competition, innovators are relying on labyrinthine defenses to ensure they can keep hauling in the cash from their products for as long as possible.
Indeed, while the ongoing litigation over the Biologics Price Competition and Innovation Act (BPCIA) is expected to eventually iron out the various interpretations of the law, which gave the FDA the authority to license biosimilars, the patent infringement lawsuits and inter partes review (IPR) proceedings are likely to get much more complicated as time goes on – adding significantly to the time it may take for those products to start making profits.
Just ask Pfizer Inc. and Celltrion Inc., whose biosimilar Inflectra (infliximab-dyyb), which was approved in April by the FDA, has been caught up in an ongoing legal dispute with Johnson & Johnson unit Janssen Biotech Inc., whose rheumatoid arthritis and Crohn's disease medicine Remicade is the reference product. (Also see "Celltrion/Pfizer Inflectra Second US Biosimilar; Many Firsts" - Scrip, 6 Apr, 2016.)
Companies on both sides of the dispute came away with some wins and losses from a three-day hearing Aug. 16-18 at the US District Court for the District of Massachusetts, although Pfizer and Celltrion for now came out the bigger winners after the judge in two separate rulings declared J&J's '471 patent on Remicade invalid, making it more likely Inflectra will be launched on Oct. 3.
The biosimilar sponsors agreed earlier they would not launch before that date, which they said is the day after the BPCIA's 180-day notice of commercial marketing period would expire.
But J&J said it would appeal the rulings on the '471 patent and would continue to defend its intellectual property rights. It said it viewed any effort to commercialize an infliximab biosimilar before the court rules as an "at-risk launch."
J&J, however, won on its claim construction arguments involving its '083 patent, which is directed to a cell culture media used to produce infliximab. That patent isn't due to expire until 2027. The court also set a trial date of Feb. 13, 2017.
It's Getting Complicated
The case involving Remicade's patents is just one among several sticky infringement lawsuits targeting biosimilars, with the numbers of those disputes expected to continue to rise.
"First and foremost, the parties seeking to get their biosimilar to the market need to get around any patents that the reference product sponsor asserts," explained New York lawyer Robert Cerwinski, a partner in the intellectual property litigation group at Goodwin Procter.
But innovators are trying to make that task as thorny as possible, hoping not only to keep their brand-name medicines viable in the marketplace for an extended amount of time but also to discourage other firms from pursuing biosimilars.
The legal battle Sandoz Inc. endured to get its biosimilar Zarxio (filgrastim-sndz) into the hands of patients was a cakewalk compared with what Amgen Inc. is now facing getting a version of AbbVie Inc.'s Humira (adalimumab) onto the US market.
Amgen was on the other side with Zarxio, defending its human granulocyte colony-stimulating factor (G-CSF) Neupogen against Sandoz's biosimilar. There was limited patent protection remaining on filgrastim, so the litigation only thwarted the biosimilar's commercialization for six months after licensure, Cerwinski noted. (Also see "1st U.S. Biosimilar Arrives: Zarxio Launches; Legal Saga Ongoing " - Scrip, 3 Sep, 2015.)
But in the case of Humira, AbbVie's tactics could extensively draw out the time it takes Amgen to get its biosimilar to the market.
The first wave of patent litigation includes only 10 patents due to how Amgen has conducted the so-called "patent dance" negotiations. But AbbVie said that Amgen's product actually infringes over 60 patents.
"There will be a second wave of litigation to adjudicate AbbVie's substantial patent rights relating to Humira," the company declared in its Aug. 4 complaint.
AbbVie took the opportunity in its complaint to accuse Amgen of essentially being a hypocrite – insisting the latter firm has been "speaking out of both sides of its mouth" as both an innovator that has taken legal action against other firms, like Sandoz and Apotex Inc., that have attempted to "knock off its biologic products," and as a biosimilar maker trying to profit from innovations involved in creating Humira.
Robert Cerwinski
"While Amgen may hope to profit by straddling the fence, it should be held to the positions it has taken in procuring its own patents and litigating those patents against biosimilars," AbbVie charged.
Biosimilar makers would do well to anticipate a "no holds barred" counterattack from innovators who have erected patent protections whose complexities will be reflected in the litigation and other legal activities they'll be waging against their potential competitors, Cerwinski said.
"In general with patent infringement litigation, the complexity increases when the number of patents being asserted goes up and the number of patent families goes up," he explained. "There are more issues for the court to resolve before the biosimilar applicant is free to market without risk of being held liable for patent infringement."
With Great Complexity, Comes Great Costs
Given the complex nature of biopharmaceutical products, the costs of biosimilar litigation are going to be on the high end of the spectrum for what is spent on patent infringement lawsuits, Cerwinski said, adding that brand-name manufacturers likely are going to be shelling out much higher legal fees to protect their medicines than their challengers.
"These are big products," he said. Humira sales reached more than $14bn in 2015 and are still on the rise; AbbVie expects it to reach $18bn in 2020. Remicade peaked at over $9bn in annual sales.
According to the American Intellectual Property Law Association, the average cost of patent litigation in 2015 when innovators have $10m to $25m at risk was about $1.9m through the end of discovery and about $3.1m for all costs. When more than $25m was at risk, it was $3m through end of discovery and $5m for all costs.
"The stakes are higher, thus expect costs to be even higher" for biosimilar lawsuits, Widener's Fuhr said.
But Joseph Fuhr, professor of economics at Widener University, pointed out that sales of biologics run into the billions of dollars, so "the stakes are higher, thus expect costs to be even higher" for legal fees involving biosimilar lawsuits.
PWC recently reported the median patent infringement damages award in 2015 was $10.2m – the highest point in 10 years – although one verdict reached as high as $533m in a case involving media storage technology. But biotechs and pharmaceutical companies had the highest median damages awards in 2015, PWC said.
Centocor Ortho Biotech Inc., another part of J&J, holds the record in the past decade for the largest patent infringement damages award, winning $1.67bn in 2009 from a Texas federal court in a case involving four claims on a patent the company asserted was infringed by Abbott (before AbbVie split off as the pharma business). Centocor asserted Humira infringed four claims on the company's '775 patent. But the Federal Circuit in 2011 overturned that ruling, declaring Centocor's claims invalid, and the Supreme Court the next year declined to hear Centocor's appeal.
Stipulating To Save Cash
Amgen and Roche and their rival Sandoz, which is seeking to put a biosimilar version of Enbrel (etanercept) on the US market, may have found a way to save themselves some cash and courtroom time – stipulating to a preliminary injunction rather than having the court hear the motion from the innovators, which are claiming a total of five patents have been infringed. (Also see "Lawsuit: Sandoz Copycat Piggybacks Enbrel, Ducks Duties" - Scrip, 1 Mar, 2016.)
Sandoz, nonetheless, has reserved the right to seek damages should it prevail on the merits in the case, yet its biosimilar would be kept off the market for much of the duration of the litigation as a result of the injunction, Cerwinski pointed out.
Whether other innovators and biosimilar makers will come together on such agreements and follow that stipulation strategy depends on several factors, including how many patents are at issue and how strong the parties believe the their claims are for non-infringement and invalidity, he said.
Innovators must establish a reasonable likelihood of success on the merits, in other words, that there is a reasonable likelihood it will prove infringement and that it will defeat the biosimilar applicant on the invalidity challenge, Cerwinski said.
"So if the court rules in the biosimilar applicant's favor on a preliminary injunction motion, that could be leverage for settlement," he said.
A Two-Front War
Innovators are facing a two-front war on their patents, with challengers turning more and more to the US Patent & Trademark Office (PTO) Patent Trial and Appeal Board (PTAB) to seek judgments through the IPR process – something Apotex is counting on to get its version of Amgen's Neulasta (pegfilgrastim) onto the US market.
IPRs are trial proceedings created five years ago to be a faster and more affordable alternative to challenging patents in the courts.
Catch Up On Biosimilar Litigation:
Coherus BioSciences Inc. and Boehringer Ingelheim GMBH also are among those pursuing the PTAB route. Those two firms are attempting to get certain patents held by AbbVie on Humira invalidated. (Also see "AbbVie Foe Coherus Sways PTAB To Review Humira Patent" - Scrip, 17 May, 2016.)
With Apotex already on the losing end at the US Court of Appeals for the Federal Circuit on the BPCIA question of the 180-day commercial notice and failing at the US District Court for the Southern District of Florida to show the '138 patent on Neulasta was invalid for anticipation, lack of written description, indefiniteness and obviousness, the IPR process is a way for the company to open a new front in its biosimilar pursuit, Cerwinski said. (Also see "Tentative-Style Approvals Coming For US Biosimilars?" - Scrip, 6 Jul, 2016.)
He noted the PTAB's preponderance of the evidence standard for establishing invalidity and its broadest reasonable construction standard for interpreting claims, which was recently upheld by the Supreme Court, is less stringent than the clear and convincing evidentiary burden patent challengers must meet at the district court. (Also see "Congress Last Resort On IPRs After Supreme Court Backs Patent Board" - Scrip, 21 Jun, 2016.)
Still, Apotex must wait to see if the PTAB institutes on the firm's IPR and even if it does, it likely won't have a verdict in hand until 2018.
There's been much fretting from the brand-name biopharmaceutical community over the use of the IPRs, because close to 90% of the proceedings ended in cancellation of some or all claims in the patent under review. (Also see "BIO: Deals, Investment At Risk If IPR Course Unchanged" - Scrip, 21 Apr, 2016.)
But Cerwinski said that percentage has come down in recent months, "and it's much more balanced now."
Nonetheless, if the PTAB institutes proceedings, innovators must be ready to expect that at least one of their challenged claims could be invalidated.