Biotech General Discussion

Yesterday, after the markets closed, as scheduled, Judge Miranda Du, of the federal District Court of Nevada reached her highly anticipated decision, supported by a 70 page opinion, in the Abbreviated New Drug Application (ANDA) (i.e. generic drug) litigation between Amarin and generic company defendants Hikma and Dr. Reddy's Laboratories. As background, the defendants submitted an ANDA to the FDA some years ago for a generic version of Vascepa. Vascepa (icosapent ethyl) is a highly purified eicosapentaenoic acid ethyl ester (EPA) that has been shown to reduce cardiovascular risk in people with elevated triglycerides. Unfortunately for AMRN, in yesterday's ruling although the court held that the defendants' proposed generic products and their associated label, induced infringement of AMRN's asserted patents, the court ruled that the AMRN patents were not valid. As expected, shortly after the ruling, AMRN announced that it would appeal the ruling and seek an injunction to stop the generic companies from launching their generic .

Let's break this down so that biopharma investors can better understand what this ruling means for AMRN and these generic companies. One important fact is that unless the parties settle this litigation, which could happen at any time while this lawsuit is pending, it is likely to go on for some years. Since this is a District Court decision, it is typically not the final court ruling in a patent case. AMRN is entitled to an Appeal, which as indicated above, it intends to file. Thus, a panel of judges from the Federal Circuit, the appellate court that hears all patent case appeals in the US, will hear the parties' arguments and make a decision on whether to reverse the District Court judge's ruling. The Federal Circuit appellate review is likely to take 1-2 years (See FIG. 1).

Fed Circuit annual statistics showing median time to a Federal Circuit decision once an Appeal is filed.

The two key substantive issues in the lawsuit were 1) whether AMRN's asserted patents were invalid over the cited prior art references, and 2) whether the generic defendants generic product and associated label would induce infringement of the asserted patents despite the fact that the label indication does not give a minimum length of treatment and the patent claims recite administration for at least 12 weeks. In the initial appeal, only the first ruling will be reviewed, since the second ruling doesn't matter unless the first ruling is reversed. On its face and without considering the specific details of this case, the obviousness ruling may seem unfair. And for many of us who own AMRN stock, the ruling was painful. However, the judge used a 70 page opinion to explain her ruling, and her reasoning given the facts and patents in this lawsuit is not ridiculous. For the obvious ruling the judge relied in part on the fact that the advantage of EPA over DPA at reducing TGs without increasing LDL-C was disclosed in Mori et al. 2000, and regarding secondary factors, the REDUCE-IT trial was not directed at people with TG levels recited in the asserted patent claims.

It is important to note that the obviousness ruling against AMRN will be reviewed by a de novo standard. That means that the appellate panel doesn't give any deference to the District Court judges ruling on this issue. However, keep in mind that the appellate court will give deference to the District Court for any factual findings that formed the basis of its ruling. We have seen Federal Circuit general data from prior years where this appellate court upheld obviousness rulings most of the time, but we don't know how many cases that data represents and each case will be very fact specific for obviousness. We are currently further assessing AMRN's chances given the facts and record in this case.

This appellate court panel decision will not be the end of this lawsuit. After the Federal Circuit panel reaches its decision, the case could go back to the district court for further consideration, it could go to a review by all the Federal Circuit judges (i.e. en banc review), or it could go the Supreme Court (See here for an overview of federal courts), although that is unlikely since the Supreme Court reviews (i.e. grants certiori) in only a small percent of cases (See e.g. Hoffman and Kinder: "Supreme Court Review of Federal Circuit Patent Cases" (2010)). The case could go through this process several times on different issues that arise. If you want to see an example of this sort of up and down protracted patent litigation, research the Amgen v. Sanofi and Regeneron ongoing litigation on PSK-9 inhibitors for LDL-C reduction.

Can the generic drug makers launch their generic EPA products while this Appeal is pending and the litigation works its way through the courts? AMRN announced that it intends to seek a preliminary injunction to stop the generic drug makers from launching their generic EPA products during the appeal process. There are a number of factors that the court will consider in view of the specific facts to rule on this injunction request. We are currently researching the likelihood of an injunction given the present facts and rulings in other cases with similar facts.

In addition to the complex issues in this litigation, there are issues that are not addressed that will impact how well AMRN will be able to defend its Vascepa sales from generic entrants. Even if AMRN loses this pending ANDA lawsuit in the end, it still has some hope of defending a significant part of its Vascepa market. For example, it is important to note that all the asserted patents in this lawsuit are directed to Vascepa's original approved indication for patients with severe (greater than or equal to 500 mg/dL) hypertriglyceridemia. This is not the much larger market-sized indication of Vascepa's expanded cardiovascular risk reduction label.

AMRN has other patents around this much larger cardiovascular risk reduction indication (e.g. see U.S. Pat. No. 9,693,984). However, the generic companies should still be able to capture sales in this indication if they can launch what physician's will know is an identical and lower priced generic EPA product despite the limited label language that will carve out Vascepa's expanded use. This is a complicated legal issue that is beyond the scope of this article, especially in this situation where the vast majority of the market is in the expanded use. The Vascepa cardiovascular risk reduction patents could be the basis of another litigation between these companies that provides more uncertainty. Finally, we have not seen an announcement that AMRN has sought or received, 3 years of exclusivity from the FDA for the new cardiovascular risk reduction indication approval (See FDA brochure), which will give them some time before additional ANDA filings are made by generic companies to launch generic EPA products that include the expanded use cardiovascular risk reduction label.

In summary, yesterday's District Court ruling is a blow to AMRN. They lost that round. However, this is a long fight with more rounds to come. Unless there are settlements, It will still likely be at least several years before we have clarity on whether AMRN will be able to successfully defend its Vascepa market using its patent portfolio.

Manny Vacchiano, JD, PhD

I split my professional time as a registered U.S. biotech patent attorney who has been practicing for about 20 years, and founder of AMP, wherein I lead our team in analyzing and investing in public biopharma companies

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