February 25, 2013 4:50 pm
This article is provided to FT.com readers by BioPharm Insight—a news service focused on providing insight into the most price sensitive issues in the global pharmaceutical market. www.biopharminsight.com
Endo Health Solutions’ (NASDAQ:ENDP) litigation against Impax Laboratories (NASDAQ:IPXL) concerning crush-resistant pain drug Opana Extended-Release (ER) is unlikely to reach a settlement until a US Food and Drug Administration (FDA) decision to withdraw generics of the original formulation is made in May, attorneys interviewed by BioPharm Insight said.
Regardless of the FDA decision, Impax should be able to design around Endo’s patents covering crush-resistant Opana ER, the attorneys said, noting that Endo is also open to a challenge regarding the validity of its patents.
Endo filed a suit against Impax on 18 January in the Southern District of New York. The complaint said that in a letter on 5 December 2012, Impax submitted an approval application for a generic version of crush-resistant Opana ER before the expiration of patents covering the drug, which was approved in December 2011. At that time, Endo withdrew its original Opana formulation, approved in 2006.
A nontamper-proof pain killer is amenable to being crushed and abused through snorting, chewing or injecting to get high.
Impax filed a suit against the FDA on 30 November 2012 to force the agency to rule that Endo withdrew the original Opana, the nontamper-resistant form, for its abuse potential. Despite the case being dismissed in federal court on 20 December, the agency will decide whether it should suspend future approval and withdraw current generic versions of the original Opana formulation for safety reasons.
In 2010, Impax and Endo reached a settlement granting the former a license to sell a generic formulation of the original Opana from 1 January 2013. If FDA does not rule in Endo’s favor, the past settlement increases the likelihood of the two companies working together and walking away with licenses related to the ongoing litigation, said Douglas Robinson, associate, Harness Dickey, St. Louis, Missouri.
However, Robert Gould, partner, Husch Blackwell, Chicago, Illinois, noted Endo is unlikely to settle, especially if it is able to prevail on an interference proceeding concerning one of its main crush-resistant Opana patents. An interference proceeding occurs when two or more parties claim identical inventions. An oral argument is scheduled for 11 October 2013 to begin the process of determining who the first inventor of the patent in question was.
Endo did not return a request for comment by press time. Impax declined to comment.
Settlement unlikely if FDA decides in Endo’s favor
Endo has a strong case that its crush-proof formulation significantly reduces abuse; therefore the FDA might support the position of prohibiting nontamper-proof formulations from coming onto the market, said Katherine Kowalchyk, attorney, Merchant & Gould, Minneapolis, Minnesota. Robinson agreed but noted the FDA is skeptical of Endo’s position. The agency has realized the company’s pursuit of ridding noncrush-proof generic Opana formulations from the market is more for competitive reasons and not purely because of safety, Robinson said.
In 2011, original Opana global sales were USD 384.3m. Global tamper-resistant Opana ER sales are expected to hit USD 515m in 2016, according to BioPharm Insight data.
Generic filers to Opana ER will likely have to demonstrate that their products have comparable abuse-resistant mechanisms to Endo’s product, BioPharm Insight previously reported.
Therefore, a settlement before the May FDA decision is unlikely, Robinson pointed out. It is more likely the Endo v. Impax case will play out depending on FDA’s ruling on whether tamper-proof formulations will be required, Kowalchyk said.
Furthermore, the instatement of a new CEO will make a big difference to Endo’s willingness to settle, Robinson said. It was announced last year that Endo CEO David Holveck will retire this year.
Endo to face noninfringement, invalidity attacks
The US patents involved in the litigation with Impax include: Nos. 7,851, 482 (’482), 8,309,122 (’122), 8,114,383 (’383), 8.192,722 (’722) and 8,309,060 (’060).
The patents covering hardness of crush-resistant Opana ER (’383, ‘722 and ‘060) are specific, thus Impax can readily adopt a noninfringement stance, Robinson and Kowalchyk agreed.
The key ‘482 patent describes a specific purity requirement, and a generic could get around that claim by having more impurity; however, from a commercial standpoint, this is likely not a good strategy as the generic would be less pure, Robinson said.
There are several good angles of attack for generics, Gould added, noting Endo is in a vulnerable position.
The ‘122 and ‘216 patents describe broad claims in reference to a controlled-release drug formulation, Robinson indicated. These patents are subject to a validity challenge considering controlled-release formulations, used to prolong drug action, have been around for a while, he said. Endo could have some success here if it argues there is no previous background information in the public domain specifically describing an Opana controlled-release formulation, he said.
The numerous declarations of evidence cited by Endo are a source of attack from a validity standpoint, Kowalchyk and Gould said. Robinson agreed declarations, or statements made by individuals such as knowledgeable experts, are a source of attack but added it will be a tough call as both sides could have good arguments.
Patent interference case also impacts Opana control
The ‘482 patent, which covers Opana product claims, is undergoing an interference proceeding involving US patent application No. 11/915, 606. Mallinckrodt, Covidien’s (NYSE:COV) pharmaceutical business, is listed as the senior party, or the one who filed the earlier patent application, therefore Endo faces the strong possibility of losing the interference, he indicated. Whoever wins has control of the Opana active ingredient, he noted.
The priority statements are not yet public, so it is unclear if Endo will be able to show that inventorship of the patent predates Mallinckrodt’s effective filing date, Kowalchyk said.
Endo is asserting that Mallinckrodt is not entitled to its priority date, because the priority documents lack written description and the process described in the patent application would not result in a composition as claimed, Kowalchyk noted.
The establishment of the earliest date of conception and the embodiment of the invention is not going to be straightforward, she added. During prosecution, the ‘482 patentee included a declaration and laboratory notebook pages from an inventor to show a conception date before the senior party’s priority date, Robinson indicated. The actual dates of conception for the ‘482 patent were blacked out, so Endo believes it has evidence that its invention was conceived of before the senior party’s invention, he explained.
But the senior party has yet to introduce evidence of how early it conceived the invention, Robinson said, noting conception date is the wildcard.
With oral arguments in October 2013, more information about conception dates can be expected to be filed during the summer, Robinson said.
The interference is a pivotal issue, as Endo cannot manufacture Opana if it loses, Gould said. Yet, if the FDA rules in favor of Endo on the crush-proof issue, Mallinckrodt wouldn’t be able to manufacture the crush-resistant formulation of the pain drug since the former retains those patents, he added. Therefore it is likely Endo and Mallinckrodt will reach a licensing agreement.
Gould noted he does not expect Endo to settle with the generics if they win the interference or end up cross-licensing Mallinckrodt’s application. Endo will try to fend off generics for quite a long while given the expiration dates of the patents covering crush-proof Opana, Gould said. The ‘722 and ‘060 patents are set to expire November 2014, and ‘216 and ‘122 expire in 2022. The ‘383 patent expires in 2023 and ‘482 in 2026.
Endo’s market cap is USD 3.2bn and that of Impax is USD 1.3bn.
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