Drug Industry Daily - Sept. 7, 2010 Issue

Vol. 9 No. 173

Federal Circuit Ruling Could Lead to Increase in False Patent Suits

A ruling by the U.S. Court of Appeals for the Federal Circuit could open the floodgates for false patent lawsuits against drugmakers.

A private citizen last week won the right to pursue a false patent lawsuit against Brooks Brothers, a clothing company, when the Federal Circuit reversed a lower court’s decision.

In that decision, a New York federal court had determined that Raymond Stauffer had no right to file the suit since he was not harmed by the fact that a Brooks Brothers tie was marked with an expired patent.

The Federal Circuit ruling could clear the way for hundreds of similar false-patent lawsuits that have been filed as whistle-blower cases against a range of companies, including Abbott Laboratories and Bayer HealthCare.

The cases were filed as a result of an earlier Federal Circuit ruling, in which the court said companies found guilty of marking their products with an expired patent can be held liable for up to $500 for each offense. That can add up quickly because each unit of the product sold can be considered a separate offense (DID, Aug. 19).

Expired patent numbers are not the only issue in false marking cases, Steven Henry, an attorney at Wolf, Greenfield & Sacks, told DID. Manufacturers also can expose themselves to liability by marking their products with patent numbers that do not apply to that particular product.

“The inclusion of patent numbers that do not apply to specific products, especially where the manufacturer knows they do not apply to some products and just uses the one-size-fits-all approach for convenience or cost savings, could constitute false marking,” he said.

To avoid such problems, companies should evaluate their patent markings, product by product, to determine if they are all still valid and in force. “Keep in mind that product evolution could have transformed a covered product into one no longer covered,” Henry said.

If a patent has expired or has been found invalid or unenforceable, it should be removed from the marking as quickly as possible.

Manufacturers also should adopt procedures for removing patents from markings as they expire. They also should include an evaluation of patent markings on the check list for acceptance of new versions of products, he said. 

Another solution is to stop marking patents altogether, Bill Clemmons, senior patent attorney at Smith & Nephew, told DID.

Another step is to seek a judicial declaration on the criticality of an “intent to deceive,” Clemmons said. A provision in the law governing false marking says a plaintiff must prove the marking was done with the intent to deceive the public.

He also suggested that drugmakers turn to Congress for help. Efforts are already under way to persuade Congress to change the language of the law to limit damages. — Virgil Dickson


Chelsea Therapeutics Sees Opportunity in Shire’s ProAmatine Withdrawal

The planned withdrawal at the end of the month of Shire’s low-blood pressure drug ProAmatine will likely boost the fortunes of Chelsea Therapeutics’ lead candidate.

If approved, Chelsea’s Northera (droxidopa), currently in Phase III for the treatment of neurogenic orthostatic hypotension (NOH), would become the only FDA-approved drug for the condition upon ProAmatine’s (midodrine HCl) departure from the market. Chelsea is planning an NDA filing in the first half of next year.

Shire confirmed last month that it planned to withdraw ProAmatine from the market on Sept. 30 for business reasons. Although the drug is available as a generic, the FDA put pressure on the company to fulfill postmarket commitments, even though the drug has been on the market 14 years (DID, Aug. 18).

Unless generic firms conduct the postmarket trials, generic midodrine will also likely disappear from the market. About 100,000 patients filled prescriptions for the drug last year.

Chelsea believes the patient population for Northera, which has orphan drug status, can be expanded greatly since about 20 percent to 25 percent of Parkinson’s disease patients also suffer from the condition, Chief Medical Officer William Schwieterman told DID, adding specialists including neurologists would likely be targeted. The company estimates 300,000 patients suffer from NOH in the U.S. and EU.

Droxidopa has advantages over midodrine, according to Chelsea, since Northera is not associated with side effects, including hypertension and piloerection.

As a synthetic precursor of the neurotransmitter norepinephrine, droxidopa works by stimulating receptors that control vasoconstriction, improving blood pressure. It has orphan drug status in the U.S.

In May, Chelsea was buoyed by results from a long-term safety extension study showing the drug improved NOH in patients and had a good safety profile. Results from a pivotal Phase III trial are expected later this month.

Although droxidopa is already approved in Japan for NOH, Schwieterman believes the drug could be used for a variety of indications due to its mechanism of action. The drug is also in Phase II for fibromyalgia and Chelsea announced last month it started a Phase II program for the drug in chronic fatigue syndrome. — Jonathan Block


Federal Court Upholds Lilly’s Patents on Evista

Eli Lilly’s patent protection on its osteoporosis drug Evista has been upheld following a federal appeals court’s refusal to overturn a lower court’s decision.

The U.S. Court of Appeals for the Federal Circuit has ruled that generic-drug maker Teva Pharmaceutical’s challenge to Lilly’s patents on Evista  (raloxifene HCl) was unfounded and the ruling last year from the U.S. District Court for the Southern District of Indiana was valid.

Teva had argued that four patents regarding the use of Evista to prevent or treat osteoporosis were invalid on the basis of obviousness, but the Indiana court rejected the argument and enjoined the company from launching generic Evista tablets before the ’086, ’968, ’049 and ’050 patents expire March 2, 2014 (DID, Sept. 26, 2009).

In its ruling last week, the appeals court found that the Indiana court was correct in its decision.

“This court detects no clear error in the trial court’s findings on the underlying facts of obviousness and detects no error in its conclusion that the record does not contain a clear and convincing showing that [Lilly’s] patents would have been obvious at the time of invention,” the appeals court says.

Teva also presented an argument that Lilly’s patents were invalid for double patenting, but the appeals court rejected this as well, saying that Teva did not raise the issue before the district court and there was “at least some doubt” to the claims.

A spokeswoman for Teva did not respond by press time to a request for comment on whether the company plans to pursue further appeals in the case.

The ruling is the second victory this year the appeals court has handed to Lilly for Evista, which brought in $1 billion in worldwide sales in 2009. The court ruled in March that a Lilly patent on the drug does not infringe Ariad Pharmaceuticals’ patent on a method of treating disease (DID, March 23).

The decision also bodes well for Lilly’s suit against Watson Pharmaceuticals, which is challenging Lilly’s ’811, ’719 and ’064 patents on Evista in the Indiana court (DID, May 7). — David Belian


Celldex Continues Immunotherapy Development as Pfizer Ends Agreement

Celldex Therapeutics will continue to develop its lead drug candidate after Pfizer relinquished worldwide rights to develop and commercialize the Phase II therapeutic vaccine for brain cancer.

Effective Nov. 1, Celldex will regain the rights to rindopepimut (CDX-110), an experimental therapeutic cancer vaccine that targets the tumor-specific variant III of epidermal growth factor receptor in patients with glioblastoma multiforme (GBM).

Celldex CEO Anthony Marucci said the company remains fully committed to developing rindopepimut. “We see this as a tremendous opportunity for Celldex, our shareholders and the patients who suffer from GBM. We believe the rindopepimut program is very well-positioned for a pivotal trial,” he said during a Friday conference call.

Seventy percent of patients in the ACT III trial were progression-free 5.5 months after initiating treatment. The results correspond with two previous trials, which reported progression-free survival rates at 8.5 months in, respectively, 70 percent and 80 percent of patients.

In addition to the Phase II study, Celldex said it has developed a diagnostic companion product, manufactured drug supply for clinical studies and begun discussions with the FDA and other regulatory agencies on the design of a global controlled study.

Celldex said the rindopepimut program is no longer a strategic priority for Pfizer, which had agreed in April 2008 to pay as much as $440 million, plus royalties, to develop rindopepimut. Celldex has estimated that the brain cancer immunotherapy could have $450 million in peak annual sales.

Tom Davis, Celldex’s chief medical officer, said the therapeutic cancer vaccine market has expanded in the last few years, with positive results from Biovest International’s customized anti-cancer vaccine BiovaxID to treat a form of non-Hodgkin’s lymphoma and the approval of Dendreon’s Provenge for metastatic prostate cancer (DID, Sept. 2).

“Today there is clear validation of the vaccine approach to cancer therapy and now with Provenge on the market, I think people readily accept the fact that vaccines can impact the course of the disease,” he said. — LaCrisha Butler


Manufacturers Using Virtual Suppliers Must Tweak SOPs

Manufacturers considering virtual suppliers must first make sure their supplier qualification process can handle such businesses, an expert says.

There are two common pitfalls for companies dealing with virtual suppliers: not recognizing they are probably already doing business with one, and not being prepared to qualify and oversee them, John Avellanet, managing director and principal of Cerulean Associates, told DID.

“Step one is to see if your supplier qualification process requires an onsite audit,” Avellanet said. “If so, you’re not prepared. After all, it’s quite impractical to conduct an onsite audit of a virtual supplier.”

Avellanet has seen some manufacturers with standard operating procedures (SOPs) that state all critical suppliers require an onsite audit. But then the company will classify a distributor as a critical supplier, “and yet that distributor is nothing more than someone’s home address and a website.”

When establishing initial supplier selection criteria, companies should involve more departments than just product development, purchasing and quality, he said. For example, he recommends involving the legal department as part of a discussion of how much it would cost to take a supplier to court, and what other enforcement options might be.

“Thinking about your enforcement capabilities is absolutely crucial long before you choose a particular virtual supplier or select monitoring controls,” Avellanet added. “In the worst case, a virtual supplier can simply shut down and reopen as a completely different company in the span of a few days.”

Therefore, companies should work with their legal departments ahead of time to find out what documents and records would be needed in the event a virtual supplier decides to shut down. The company’s virtual supplier qualification and monitoring effort should be able to gather those records.

Companies also should verify that their quality due diligence process can audit virtual suppliers. An onsite audit is not appropriate, so this leaves activities such as paper audits and due diligence background screenings.

The most effective steps to tackle due diligence for virtual suppliers include:

  • Creating two different levels of supplier criteria selection, then mapping the supply chain and, if possible, first-tier suppliers’ supply chains;
  • Conducting remote due diligence including using two different tiers of supplier questionnaires, which may need to be filled out by the company’s own personnel, as the virtual supplier cannot always be counted on to return the questionnaire; and
  • Assessing how the supplier conducts legal negotiations, including contracts, service level agreements and quality or technical agreements.

Once a manufacturer chooses a virtual supplier, it should monitor that supplier both cross-functionally and proactively, Avellanet said.

Ongoing controls should include check-ins, at least quarterly, with lead functional personnel across the company from departments such as quality, purchasing, shipping and receiving and IT. Simple emails or phone calls can suffice, he added.

One goal for such check-ins is to remain aware of any changes that the virtual supplier has made or is going to make. These cross-functional check-ins are one way that companies can pick up on an impending problem.

For example, if a supplier changes its email and physical address several times over the course of a year, the quality department might not be aware but other departments might. — April Hollis

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