What We Learned About Biologics on Summer Vacation

A number of legal trends have emerged in biologics litigation over the summer. Below we discuss 5 of the most significant.

One Notice Is Sufficient if the Underlying Biologic Remains the Same

Under the Biologics Price Competition and Innovation Act of 2009 (BPCIA), one step of the infamous “patent dance” requires a pharmaceutical company seeking to market a biosimilar product to notify the biologics product reference application holder “not later than 180 days before the date of the first commercial marketing” of the biosimilar. But does an applicant have to renotify the reference product sponsor when it supplements its initial abbreviated biologics license application (aBLA)? That was the issue posed to the United States Court of Appeals for the Federal Circuit in Genentech Inc v Immunex Rhode Island Corp.¹ The court ultimately concluded no additional notice is required.

Immunex (a company acquired by Amgen) filed an aBLA with the FDA and subsequently notified Genentech, the reference drug sponsor for Avastin®, that it intended to market a biosimilar version, Mvasi™. After providing its initial notice, Amgen submitted 4 supplemental applications, which included changes to the manufacturing facility and label. Genentech filed an emergency motion seeking to preclude Amgen from commercially marketing Mvasi™, arguing that Amgen did not provide proper commercial notice because the supplemental applications amending the manufacturing facility and label effectively reset the 180-day period. The district court disagreed, and on appeal, the Federal Circuit affirmed the decision. According to the Federal Circuit, supplemental applications do not require a new notice so long as the biological product that is the subject of the application does not change.

Practically speaking, the Genentech decision is a relief to biosimilars companies that may previously have been fearful that an aBLA cannot be amended during the normal FDA regulatory review process. That said, the court did not provide clear guidance about when the biological product has undergone a change sufficient to require a second notice of commercial marketing. Thus, beyond the facts of Genentech, the precise contours of when an aBLA supplement may require renewed commercial notice still remain to be seen.

Don’t Invalidate Your Biologics Patents by Licensing Them

It’s well known that biologics patent portfolios are extensive, and that licensing them can be quite lucrative for the patent owner and the licensee manufacturer. But a recent case serves as a stark reminder that companies must nevertheless be cautious when licensing patents, lest they accidentally invalidate their own portfolio through common ownership.

Under the doctrine of statutory double patenting, a patent is invalid if it covers subject matter identical to another patent owned by the same entity. This concept was implicated in Immunex Corp v Sandoz Inc, where the primary issue was whether, by a transfer of rights from Hoffman-La Roche in the 1990s, Immunex alone owned patents-in-suit covering Enbrel® (etanercept).² Because Immunex owned other patents that covered the same technology, if Immunex had owned the asserted patents outright, Sandoz may have been able to invalidate the asserted Enbrel® patents on grounds of statutory double patenting.

Considering this among other issues, the Federal Circuit determined that the Roche-Immunex license did not transfer “all substantial rights” to Immunex, thus eliminating a statutory double-patenting defense. The license at issue granted Immunex an irrevocable, exclusive license and control over the prosecution of the pending Enbrel® patent applications. The agreement also granted Immunex the right to sublicense the patents and the first right to sue any potential infringers. Notably, Roche was obligated to cooperate with any prosecution and enforcement of the patents and retained a secondary right to sue if Immunex did not file suit. Roche also retained the ability to object to any sublicenses for the patents.

In its analysis, the majority gave significant weight to Roche’s retention of a secondary right to sue and the ability to prevent Immunex from further licensing the patents. Because these rights are inconsistent with the transfer of all substantial rights for a patent, the court reasoned, Immunex was not an owner. In dissent, Judge Jimmie V. Reyna argued that the license transferred all substantial rights to Immunex, rendering it the sole owner of the asserted patents.

This case shows that companies must be diligent when entering license agreements and appropriately structure such agreements to avoid being considered an owner if the covered matter substantially overlaps with existing portfolio assets. Indeed, in the case of large biologics portfolios, such caution is all the more necessary.

Go Big and Follow the Rules

By their nature, biologics portfolios are large; AbbVie’s Humira® (adalimumab) is covered by approximately 247 patent applications that resulted in 132 patents, over 100 of which trace back to just 20 original applications. So, it was no surprise that after AbbVie settled several large-scale litigations relating to Humira® with a variety of biosimilars companies, a group of indirect purchasers sued in federal court alleging that the settlements were antitrust violations.³​

What was surprising, however, were the plaintiffs’ theories about the case. To be sure, the plaintiffs asserted the typical claim that the settlements were illegal restraints of trade, an argument that failed because the district court concluded that AbbVie’s settlements (which permitted competitors to immediately enter the European market but refrain from entering the US market until 2023) were not unlawfully anticompetitive. However, the plaintiffs also advanced a second, more creative theory: that AbbVie impermissibly monopolized the domestic market for Humira® by obtaining and asserting invalid, unenforceable, or noninfringed patents without regard to the merits of such assertions. This argument likewise failed. The district court found that AbbVie’s conduct was not objectively baseless for multiple reasons, including because the United States Patent and Trademark Office had granted more than half of AbbVie’s patent applications and a substantial majority of the patents challenged in inter partes review proceedings had survived. These successes convinced the district court that AbbVie’s conduct was not unreasonable and shielded AbbVie from antitrust scrutiny.

The plaintiffs filed a notice of appeal this past July, and a decision from the United States Court of Appeals for the Seventh Circuit is expected sometime next year. If this decision stands on appeal, it could potentially encourage biologics companies to create judicially sanctioned dense patent portfolios. In any event, biologics companies should have a focused and well-defined strategy when developing new products to ensure that they can reap the full benefits of patent protection while simultaneously avoiding antitrust exposure.

Federal Circuit Reaffirms That Common, Broad Claim Terms Are Broadly Construed

The Federal Circuit delivered a recent victory to patent owners seeking to give broad scope to the meaning of common terms in patent claims. At issue on appeal were the district court’s constructions of the terms antibody and antibody fragment in a patent asserted by Baxalta purportedly covering Genentech’s Hemlibra® (emicizumab).⁴ Notably, the district court opinion was issued by Federal Circuit Judge Timothy B. Dyk, who was sitting by designation in the District of Delaware.

The district court had concluded that without structural context, the term antibody had multiple, commonly accepted meanings. Choosing between Baxalta’s broad proposal—“molecule having a specific amino acid sequence comprising two heavy chains (H chains) and two light chains (L chains)”—and Genentech’s narrower one—“immunoglobulin molecule, having a specific amino acid sequence that only binds to the antigen that induced its synthesis or very similar antigens, consisting of two identical heavy chains (H chains) and two identical light chains (L chains)”—the district court sided with Genentech. In doing so, it relied primarily on 2 pieces of evidence: (1) the specification’s description of antibody and (2) a claim amendment made during prosecution.

On appeal, the Federal Circuit unanimously reversed the ruling. Placing nearly dispositive weight on the claim language of antibody (which does not itself require 2 identical heavy chains and 2 identical light chains or binding only the antigen that induced its synthesis or similar), the court found no reason to limit the plain meaning of the term. It drew additional support from language in a dependent claim identifying certain subsets of antibodies that fell outside the district court’s construction of the term antibody. Although the district court would have reconciled the difference by invalidating the inconsistent claims, the Federal Circuit instead found that they provided significant evidence of the breadth of the term. And contrary to the district court, the Federal Circuit refused to adopt a definition excluding claimed embodiments and disagreed that the prosecution history clearly limited the scope of the claim.

Although claim construction is a patent-specific inquiry, the Federal Circuit’s opinion reaffirms that broad terms will be given broad meaning absent a reason demonstrating that the patentee intended otherwise.

New Regulations for Biologics Are (Possibly) Coming

Earlier this year, the FDA announced that it intended to issue substantive regulations governing biologics to clarify existing requirements and procedures related to BLAs.⁵ The proposed rules are expected to be released in December 2020. The update would further “promote the goals associated with the FDA’s implementation of the abbreviated licensure pathway created by the” BPCIA. But with the details still in the works, it is unclear what changes the FDA intends to make. Certainly, with a relatively low rate of market penetration and cost savings to would-be biosimilar consumers, there could be much worth considering. Although the FDA has yet to issue any proposed rules, industry stakeholders should continue to monitor the agency’s proposed regulations to determine how the regulations could affect the biologics industry.

Conclusion

In sum, this has certainly been an interesting summer for biologics. From basic statutory interpretation to antitrust issues, the legal and business landscape for biologics continues to evolve at a rapid pace. Companies must remain adaptable and continually take appropriate measures to position themselves for future success.

References

1. Genentech Inc v Immunex Rhode Island Corp, 964 F.3d 1109 (Fed Cir 2020).
2. Immunex Corp v Sandoz Inc, 964 F.3d 1049 (Fed Cir 2020).
3. In re Humira (Adalimumab) Antitrust Litigation, 2020 WL 3051309 (ND Ill 2020).
4. Baxalta Inc v Genentech, Inc, Appeal No. 2019-1527 (Fed Cir August 27, 2020).
5. Biologics Regulation Modernization. Reginfo.gov. Accessed September 2, 2020. https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202004&RIN=0910-AI14