[Ip-health] WSJ: Eli Lilly Enters Unusual Patent Dispute

Thiru Balasubramaniam thiru at keionline.org
Mon Aug 19 06:52:38 PDT 2013


   - BUSINESS<http://online.wsj.com/public/search?article-doc-type=%7BBusiness%7D&HEADER_TEXT=Business>
   - August 18, 2013, 2:14 p.m. ET

Eli Lilly Enters Unusual Patent Dispute

   - By PETER LOFTUS <http://topics.wsj.com/person/A/biography/7317>

Patent disputes are common in the pharmaceutical industry, but Eli
Co. faces an unusual one this week that could be pivotal to the drug
maker's future. The case highlights the pressure on drug makers to preserve
market exclusivity for top-selling products for as long as possible in the
face of generic competition, pricing pressure and underproductive research

Michael Morgenstern

At a closely watched trial scheduled to begin Monday in federal court in
its hometown of Indianapolis, Lilly will defend a patent for its
lung-cancer treatment Alimta, which generated $2.6 billion in global sales
last year, or 11% of total company revenue. The patent covers the method of
administering Alimta to patients with certain vitamins designed to mitigate
side effects. A different patent covers the basic chemical composition of
Alimta, a drug that also treats mesothelioma, a rare cancer linked to
asbestos exposure.

A Lilly victory would block several generic-drug makers from selling
low-cost copies of Alimta in the U.S. market until at least 2022, when the
vitamin-regimen patent exclusivity period is due to expire. A loss,
however, could clear the way for generics to enter the market in 2017, when
patent exclusivity expires for the basic compound. That would sharply erode
sales of the original brand.

Lilly is under pressure to preserve Alimta's blockbuster sales because
patents for other drugs have reached or are approaching their natural
expiration dates. The company lost patent protection for its former top
product, the antipsychotic Zyprexa, in 2011. This year Lilly will lose
patent protection for its new No. 1 drug, antidepressant Cymbalta.

Meanwhile, Lilly hasn't produced enough newer products to replace revenue
lost to competition from generic versions of older drugs.

"Strategically, it would be a big win for them because they're facing a lot
of other patent losses," said Damien Conover, analyst with Morningstar.

Other drug makers, including
and Merck & Co., are going through similar challenges, having lost
patent protection for big drugs and are facing a gap before revenue from
newer drugs can make up the difference. Such pressures can make it more
worthwhile to try to defend secondary patents for drugs, as Lilly is doing
with Alimta.

Generic-drug companies such as Teva Pharmaceutical
requently challenge the validity of patents for brand-name drugs in
bids to start selling knockoffs before the patents expire.

Makers of brand-name drugs generally have been successful defending primary
patents that claim invention of the basic chemical compositions of their
drugs' active ingredients.

But it can be tougher and costly to defend secondary patents for the same
drug—those covering new formulations or methods to treat certain diseases,
which often have later expiration dates than the primary compound patent.
Generic-drug companies have had more success arguing that such follow-on
patents should be struck down because their claims were anticipated by
prior, publicly available research.

Still, the challenge hasn't stopped makers of brand-name drugs from seeking
and defending secondary patents. In 2011 Pfizer won a federal-court ruling
upholding a patent covering the method of using the active ingredient of
Viagra to treat erectile dysfunction, extending its market exclusivity by
seven years, to 2020, beyond the basic-compound patent exclusivity. Pfizer
successfully argued that Viagra's anti-impotence properties weren't
immediately obvious, and only became known during testing of the drug as a
potential treatment for certain heart-related conditions.

The Lilly patent at issue this week covers the method of administering
Alimta with folic acid and vitamin B12, which have been shown to reduce the
incidence of side effects of Alimta, such as low counts of white blood
cells. The vitamins themselves aren't patented. The drug's prescribing
label, approved by the U.S. Food and Drug Administration, instructs doctors
to start providing the supplements about one week before the first dose of
Alimta, and to continue them during treatment.

Several generic-drug makers, including Teva and Fresenius Kabi SE & Co.'s
APP Pharmaceuticals unit, want to sell generic versions of Alimta before
the vitamin-dosage-regimen patent expires. The generic-drug companies
argued in court papers that the patent was invalid because previous
research would have led a person of ordinary skill in oncology or nutrition
to conclude that Alimta should be given with folic acid and B12. Under
patent law, a court can deem a patent invalid if its claims are "obvious"
and anticipated by previous research.

Lilly filed a patent-infringement lawsuit against the companies in 2010,
shortly after the vitamin-dosage-regimen patent was issued. The suit seeks
a judgment that the generic companies have infringed the patent, and that
they be barred from selling copies of Alimta until the patent expires.

Lilly has said that the claimed invention wasn't obvious. In clinical
testing in the late 1990s before the drug was approved, researchers
observed "a string of drug-related deaths that had put the future" of
Alimta in jeopardy, Lilly said in court papers.

A Lilly scientist proposed administering folic acid with B12 to mitigate
the safety risk, an idea that initially "met stiff resistance both within
and outside Lilly," including at the FDA, because of concerns that it would
diminish efficacy. However, researchers eventually tried the regimen in
clinical testing, which showed that Alimta's efficacy was maintained while
the most severe and life-threatening side effects were reduced.

Lilly said that the method was an unexpected finding that essentially saved
Alimta's development.

"We believe this patent is valid and enforceable and we are prepared to
defend our intellectual property," a Lilly spokesman said. "The significant
scientific research that Lilly performed in support of the
vitamin-dosage-regimen patent deserves intellectual-property protection."

Spokesmen for Teva and Fresenius Kabi declined to comment.

—The Week Ahead looks at coming corporate events.

*Write to *Peter Loftus at peter.loftus at dowjones.com

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