With the FDA approval of the first biosimilar in the U.S., Novartis’ Zarxio (Amgen’s Neupogen), back in March, drug maker Amgen is now fighting to uphold its patent. On September 2, the Federal Circuit issued its decision denying request for a temporary restraining order in Amgen v. Sandoz, an important biosimilars litigation that could have an impact on the industry for years to come.
 
Elaine Blais, partner in Goodwin Procter’s Litigation Department, opens our eyes to some of the legal nuances behind the biosimilar litigation, including commercial marketing issues, the “patent dance”, patent infringement disputes and the commercial launch of biosimilars, as well as “interchangeable” designation by FDA, which may be vital to the long-term market success of biosimilars in the U.S. –KB
 
Contract Pharma: What are some of the main talking points in biosimilar litigation?

Elaine Blais: The two questions at issue in Amgen v. Sandoz are:
        1. Whether a biosimilar applicant may “opt out” of the series of information exchanges and patent identifications spelled out in the BPCIA, often called the “patent dance,” by not disclosing its abbreviated biologic licensing application (“aBLA”) under 42 U.S.C. § 262(l)(2)(A), “subject only to the consequences set forth in § 262(l)(9)(C).” (This is the “patent dance” question).
 
        2. Whether a biosimilar applicant that opts out of the patent dance must give 180 days’ notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A), and if it must, whether it may do so before the FDA licenses the biosimilar product (This is the “notice of commercial marketing” question.)
 
Sandoz won the “patent dance” issue:  An applicant can choose to disclose its aBLA and initiate the patent dance, or to not disclose the aBLA and face an immediate infringement action from the reference (i.e., brand) product sponsor (“RPS”).  Amgen won the notice of commercial marketing issue:  If an applicant opts out of the patent dance, it must provide 180 days’ notice of commercial marketing after the FDA approves the biosimilar product.
 
Both Amgen and Sandoz seek en banc review of the panel’s split decision on these two issues. 
 
Beyond Amgen v. Sandoz, three other pending litigations raise related issues. In Janssen v. Celltrion, 1:15-cv-10698-MLW (D. Mass.), Amgen v. Apotex, 0:15-cv-61631-JIC (S.D. Fla.) and Amgen v. Hospira, 1:15-cv-00839 (D. Del.), the parties are litigating the issue of whether 180 days’ notice of commercial marketing under 42 U.S.C. § 262(l)(8)(A) is required under other circumstances, for example when an applicant decides to participate in the patent dance. 
 
CP: What are the key arguments in the Amgen v Sandoz litigation?
 
EB: Amgen and Sandoz have filed cross-petitions seeking en banc review of the Federal Circuit panel’s July 21, 2015 decision holding that (1) a biosimilar applicant may opt out of the BPCIA “patent dance”; and (2) when the applicant opts out, the 180 day notice of commercial launch set forth in the BPCIA is mandatory, and the applicant must wait until after FDA approval to give this notice in order for it to be effective.
 
In seeking review, Amgen took issue with the panel’s holding that the patent dance is optional.  Seizing on the fact that the “panel decision in this appeal was fractured,” Amgen argued in favor of Judge Newman’s view that the word “shall” in 42 U.S.C. § 262(l)(2)(A) means that the biosimilar applicant must disclose its application to the RPS and thereby initiate the patent dance, and that ignoring this mandatory statutory language is unlawful. Amgen further argued that “[i]n holding that a [RPS] and the courts have no ability to compel an Applicant to comply with the BPCIA [patent dance], the majority erred in deciding an issue of first impression important to these parties and to the entire biopharmaceutical industry.  The full Court should hear this issue en banc to correct that error.”
 
Sandoz’s counter-argument was that the text of the BPCIA and 35 U.S.C. § 271(e)(2)(c)(ii) support the panel majority’s holding that a biosimilar applicant may “opt out” of the patent dance by refusing to provide its biosimilar application. Sandoz emphasized that the remedy specified by these statutes—granting the patentee an option to bring an immediate patent infringement action—would be superfluous if the patentee could bring a suit to compel compliance with the dance. Sandoz further argued that the panel was correct to deny Amgen a remedy under the BPCIA to force Sandoz to dance, since 35 U.S.C. § 271(e)(4) makes clear that it alone provides the remedies open to a patentee like Amgen for an act of infringement under § 271(e)(2)(c)(ii), and such a remedy is not provided.  According to Sandoz, “the BPCIA [thus] expressly precludes state-law remedies as well as any implied federal remedy.”
 
Sandoz also reasoned that the panel’s position made eminent sense on policy grounds. According to Sandoz, the overall goal of the BPCIA is to resolve patent disputes quickly and efficiently so that “biosimilars can be available to patients as soon as possible.” A biosimilar applicant should have the choice to forego the incentives provided by the BPCIA to follow the dance where those incentives are outweighed by disadvantages, such as the delay necessitated by the dance, confidentiality concerns, or its belief that no relevant patents exist.
 
In seeking review of the panel’s ruling concerning the 180-day notice period, Sandoz pointed out that “the majority . . . effectively granted 180 days of exclusivity for all biologic products beyond what Congress expressly provided in the BPCIA.  In doing so, the majority ignored the only remedy provided by Congress in the BPCIA – the right to initiate patent litigation – and instead created a new automatic injunction remedy.”  According to Sandoz, two purposes of the BPCIA are to facilitate the early resolution of patent infringement disputes and the commercial launch of biosimilars; to interpret the reference in 42 U.S.C. § 262(l)(8)(A) to a “product licensed under subsection (k)” as requiring the parties to wait to litigate preliminary injunction motions until after FDA has approved the product would undermine these purposes.
 
Amgen countered by emphasizing the majority’s view that only upon licensure will the parties know the final composition and approved uses of the biosimilar, and thus only then will the patent dispute be sufficiently “crystallized” for a preliminary injunction motion. Amgen likened the 180-day notice period to the 30-month stay in Hatch-Waxman litigation, asserting that both periods “give the district courts time, and authority, to determine whether, on a motion for preliminary injunction, the status quo should be maintained until the outcome of patent litigation.”
 
CP: What do originator companies need to prove in cases such as this one?
 
EB: Originator companies bear the burden of proving by a preponderance of the evidence that the biosimilar applicant will infringe one or more patent claims if it is permitted to make, use, sell, offer for sale or import into the U.S. the product that is the subject of the biosimilar application.  If the parties engage in the patent dance, the originator must also carefully evaluate its patent portfolio in light of the biosimilar applicant’s aBLA, and be prepared to identify those patents that it reasonably believes could be asserted in an infringement action. If the applicant declines to provide its aBLA, the originator must be diligent in monitoring the applicant’s regulatory and commercial activities; if it believes its patents are being infringed, it must take care to initiate a patent infringement action prior to FDA approval and launch.  An originator must also counter any challenges by the applicant to the validity of the asserted patents. The applicant bears the burden of proving invalidity by clear and convincing evidence, but the originator must be prepared to meet that case with countervailing evidence and arguments.
 
CP: How might the decision on this litigation impact biosimilar development? 

Rob Cerwinski: The panel’s decision leaves biosimilar applicants with at least two strategic options with regard to resolving potential patent disputes. On the one hand, the applicant may opt to litigate patent issues early by participating the patent dance. This option increases the likelihood of patent certainty prior to regulatory approval and launch and might be preferred where the applicant has some concerns about the patent landscape.
 
On the other hand, an applicant who believes that the RPS has a very weak patent case and is concerned about the timing of market entry may want to avoid the time-consuming exchanges of the patent dance. An immediate, traditional patent infringement action proceeding outside of the BPCIA may prove to be a much faster route to market in such circumstances. Some have argued that the presence of these two strategic options maximizes commercial flexibility and avoids needless delay and litigation gamesmanship.    
 
CP: What are some lessons to be learned from the European market in this sector? 
 
RC: The European market is ahead of the U.S. market in the number of biosimilar products that have been approved and marketed.  To date, 19 biosimilar products have been authorized by the EMA, whereas only one product has been approved by the FDA. 
 
The main lesson learned from the European market to date is that the market does not regard biosimilar products as being “generic biologics.”  Market uptake of biosimilars has tended to be slower than for small-molecule generic drug products.  Erosion of the pre-entry pricing structure of the reference (brand) product has also tended to be slower, with the biosimilar typically being launched at a price within 15% of the pre-entry brand price.  Doctors have been somewhat reluctant to view biosimilars as a class as interchangeable with their corresponding brand products, and instead have taken a more cautious, product-by-product approach as they await further data and market experience on safety, efficacy and interchangeability. National healthcare providers and other third-party payors have also met resistance to rules intended to promote the uptake of biosimilars, in particular the switching of existing patients to biosimilars, in the face of perceptions that biosimilars are not exactly the same as the corresponding brand products and existing patients doing well on a brand product may have a somewhat different response to a biosimilar. 
 
Regulatory guidance on how to obtain an “interchangeable” designation by FDA, i.e., a designation that a biosimilar is expected to produce the same clinical result as the brand in any given patient, may be vital to the long-term market success of biosimilars in the U.S.         
 
Authors:
Elaine Blais, a partner in Goodwin Procter’s Litigation Department, focuses her practice on intellectual property litigation, particularly with respect to patent litigation. Ms. Blais has handled numerous patent infringement lawsuits in federal courts nationwide. She joined Goodwin Procter in 2001 and has been litigating patent cases for nearly two decades. Ms. Blais has devoted a significant amount of her practice to counseling clients and advocating to Congress on behalf of clients regarding patent policy.
 
Rob Cerwinski, a partner in Goodwin Procter’s IP Litigation Group, has extensive experience litigating intellectual property matters. For more than a decade, he has successfully represented both plaintiffs and defendants in patent and trade secret litigation before federal and state courts across the country. His primary focus is on litigation involving pharmaceutical and biological products. Mr. Cerwinski brings to his practice an exceptional combination of patent law expertise and technical proficiency in the pharmaceutical and biotechnology fields.

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Kristin Brooks has been Associate Editor at Contract Pharma since 2004.