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What You Need to Know About Biosimilars : Products, Recent Deals, IP Issues and Licensing. August 2, 2012 Madison C. Jellins. Biologics Price Competition and Innovation Act. Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) signed into law March 2010

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What You Need to Know About Biosimilars : Products, Recent Deals, IP Issues and Licensing

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What You Need to Know About Biosimilars: Products, Recent Deals, IP Issues and Licensing

August 2, 2012

Madison C. Jellins

Biologics Price Competition and Innovation Act

  • Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) signed into law March 2010

  • Statute requires third-party patents

    • exclusively licensed by the Reference Product Sponsor

    • and covering the reference biologic product, manufacture or use,

    • be subjected to the patent dispute resolution procedure

    • or the third party owner will risk forfeiture of its patent rights

  • Both parties to an exclusive license agreement should ensure that current and future license agreements address possibility that licensed patents may be subjectto a biosimilar dispute

Patent Dispute Resolution Procedure

  • BPCIA was modeled on Hatch-Waxman Act

  • BPCIA establishes mechanism for resolving patent disputes

    • between sponsors of brand name biologics and biosimilar applicants

    • prior to commercial marketing of the biosimilar

  • But unlike Hatch-Waxman, the Act does not specify which patents will be subject of litigation

    • No Orange Book with listing of patents covering drug product

Patent Dispute Resolution Procedure

  • The parties must negotiate in good faith to reach agreement on the patents that will be litigated

  • The Biosimilar Applicant controls the number of patents that will be litigated in the first phase of litigation

Patent Dispute Resolution Procedure

  • Triggered by FDA’s acceptance of biosimilarapplication

  • 20 days later, Biosimilar Applicant must provide biosimilar application and information on manufacturing to Reference Product Sponsor

  • Within 60 days, RPS must identify patents it “reasonably” believes would be infringed and identify any patents it is prepared to license

  • Within 60 days of receiving initial list, BiosimilarApplicant must identify patents it believes RPS reasonably could assert and provide:

    • Statement that it does not intend to commence marketing before expiration or

    • Statement of non-infringement, invalidity or unenforceability contentions

  • Within 60 days, RPS must state for each patent on either list why the patent would be infringed and respond to invalidity and unenforceability assertions

Patent Dispute Resolution Procedure

  • After exchange of statements, parties must negotiate number of patents to be litigated

  • 15 days later, BiosimilarApplicant identifies number of patents

  • 15 days later, parties agree on number of patents to be litigated

  • 20 days later, RPS commences action on specified patents

Negotiation of Number of Patents in Suit

  • The parties must negotiate in good faith to try to reach agreement on the patents that will be litigated

  • If negotiation succeeds, the listed patents will be litigated

  • If negotiation fails, the Biosimilar Applicant specifies the number of patents that will be litigated

Second Phase of Litigation

  • 180 days before launch (12 years after approval), Biosimilar Applicant must provide notice of intention to market

  • 30 days later, reference product sponsor may assert “deferred” patents and “late issued” patents and seek preliminary injunction

  • If patent owner wins on early asserted patent, permanent injunction until patent expires

Exclusively Licensed Patents Included

  • Unlike Hatch-Waxman, BPCIA includes process patents

    • May be exclusively licensed by RPS

  • BPCIA permits but does not require the RPS to share the biosimilar application with third party owners of patents exclusively licensed to the RPS

  • BPCIA requires RPS to include relevant exclusively licensed third-party patents in its patent list

  • Exclusively licensed patents could be included in patent dispute procedure without licensor being aware of litigation or of biosimilar application

Penalties for Failure to List Third Party Patents

  • BPCIA includes several penalties for failure of RPS to include exclusively licensed patents in its list

  • Can result in forfeiture of rights for the third party patent owner/exclusive licensor

    • regardless of whether third party owner/licensor was involved in process or aware of possible infringement of its patent

Penalties for Failure to List Third Party Exclusively Licensed Patents

  • RPS can seek a preliminary injunction prior to first commercial marketing for any patent not inlitigation

    • if the patent was included on the RPS’s patent list or the BiosimilarApplicant’s list

  • The owner of a patent that should have been included on the patent lists, but was not, may not bring an action for infringement of the patent

  • Where a patent was on the lists, but the RPS was not timely in bringing suit, the suit was dismissed without prejudice, or the suit was not prosecuted to judgment in good faith, the sole remedy is a reasonable royalty

Existing and Future Exclusive License Agreements

  • Review existing exclusive license agreements to determine whether licensed patent may be subject to biosimilar patent dispute

  • For prospective licenses, evaluate value of granting an exclusive license against litigation risks and potential forfeiture of patent rights

Exclusive License Provisions

  • Licensor will want exclusive licenses to include:

    • Prompt notice of any potential biosimilarapplication

    • Right to review biosimilarapplication

    • Right to participate in determination whether to include licensed patent on RPS’ patent list

    • Right to participate in litigation as to licensed patent

  • Licensee/RPS will want exclusive license to include:

    • Limited involvement of exclusive licensee in patent dispute

    • Ability to assert licensed patent

    • Control of course of litigation and settlement

Recent IP Developments

  • Abbott petitioned FDA to prevent Humirabiosimilars on April 2, 2012

    • FDA would have no choice but to use trade secrets in Abbott’s BLA to support approval of competitor products

    • Taking under the Fifth Amendment

    • FDA should not accept for filing, file, approve or discuss with any company, or otherwise take any action indicating that the agency will consider any application for a biosimilar that cites the Humira BLA

Recent IP Developments

  • Previous court rulings have found that data submitted to the FDA constitutes trade secrets

  • Argument extended to any drugmaker that submitted a BLA for product approval prior to the enactment of the BPCIA

  • The BPCIA introduced a statutory bargain under which FDA may approve biosimilars that are highly similar to a reference product that has been approved by FDA under a BLA

  • In exchange for this partial taking of its trade secrets, the RPS receives a 12 year period of exclusivity and the opportunity for pre-market patent litigation

  • This bargain raises serious constitutional concerns if applied retroactively

  • Note: BIO disagrees:

    • “We continue to believe that the biosimilars law applies, and should apply, to all biological products, whether the reference product was approved pre- or post enactment of the law."

Recent IP Developments

  • Humira was Abbott’s top-selling drug last year with about $3.4 billion in revenue

  • Humira predicted to be the No. 1 selling drug this year with sales reaching an $9.3 billion

  • The patent on Humira expires in December 2016

  • At least three companies have begun pre-clinical or clinical testing of a Humirabiosimilar

  • Abbott plans to spinoff AbbVie later this year

    • Humirawill be 45% of the new company's sales and 85% of its profit

    • Biosimilarcompetition would impact new company that draws most of its profits from a single drug

Contact Information

  • Madison C. Jellins

  • HelixIP LLP, Silicon Valley

  • Direct: 650-241-0192

  • mcjellins@helixip.com

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