What the current wave of biosimilar litigation signals for the future

There has been a swell of US patent disputes between biologics innovators and makers of biosimilars in the past six years. With litigation governed by a highly distinctive legal and regulatory framework, IP professionals can learn plenty from recent cases

The substantial increase in patent litigation involving biosimilar drugs over the past few years has raised important new strategic and legal questions for life sciences IP practitioners.

The Biologics Price Competition and Innovation Act 2009, which created a new regulatory approval pathway for biosimilars in the United States, introduced a distinctive IP litigation framework. Centred on the multi-step exchange of information known as the ‘patent dance’, this framework also differs from that which governs generic small-molecule drug litigation in the following ways:

  • There is no Orange Book, in which all relevant patents must be listed.
  • There is no 180-day period of exclusivity for the first imitator to market.
  • Patent plaintiffs are not granted an automatic 30-month stay of approval.

The tendency for innovative biologics to be protected by larger numbers of patents than their small-molecule counterparts, as well as the greater investment and innovation required to produce biosimilars compared to small-molecule generics, also have significant strategic implications.

The story of litigation under the Biologics Price Competition and Innovation Act is still in its infancy but is evolving rapidly. The first US biosimilar was not approved by the Food and Drug Administration (FDA) until 2015, but by mid-2018 a dozen had been given the go-ahead – at the time of writing 26 have received the green light.

The first litigation complaint under the act was filed in October 2014, with 27 suits filed to date. 20 FDA-approved biosimilars have been challenged by the relevant reference product sponsors, while two more were the subject of settlements before their abbreviated Biologics Licence Application (aBLA) was submitted. In addition, six biosimilars that have yet to be approved (but for which aBLAs have been filed) have also been challenged.

Although many questions remain unanswered, we are at least now in a position to identify early trends in biosimilar patent litigation, to reflect on the factors that have informed biosimilar strategies thus far and to highlight key areas to watch out for in the future.

Key molecules and litigants

The biosimilar drugs involved in Biologics Price Competition and Innovation Act litigation so far have all related to eight molecules:

  • filgrastim and pegfilgrastim (counted as one drug) (originally marketed as Neupogen and Neulasta by Amgen);
  • infliximab (originally marketed as Remicade by Janssen);
  • epoetin alfa (originally marketed as Epogen by Amgen);
  • etanercept (originally marketed as Enbrel by Immunex, a subsidiary of Amgen);
  • adalimumab (originally marketed as Humira by AbbVie);
  • bevacizumab (originally marketed as Avastin by Genentech);
  • trastuzumab (originally marketed as Herceptin by Genentech); and
  • rituximab (originally marketed as Rituxan by Genentech).

What is more, a relatively small number of companies have played a prominent part in such litigation. Amgen in particular has played a distinctive role, acting several times as both plaintiff and biosimilar producer. The company has not only been involved in several litigations as the innovator of Neupogen (filgrastim), Neulasta (pegfilgrastim), Epogen (epoetin alfa) and Enbrel (etanercept), it has also been a defendant as the producer of biosimilar versions of bevacizumab, trastuzumab and adalimumab.

Genentech has also been prominent in early Biologics Price Competition and Innovation Act litigation, as the reference product sponsor of Avastin (bevacizumab), Herceptin (trastuzumab) and Rituxan (rituximab). Meanwhile, Sandoz, Pfizer, Celltrion and Mylan have all been involved in several different suits as biosimilar producers (see Table 1).

Patent thickets

Under the Biologics Price Competition and Innovation Act patent dance, after receiving a biosimilar’s aBLA and additional information, the innovator initially identifies any patents that it believes may be infringed by the imitation. It will then negotiate with the biosimilar applicant as to what patents will be the subject of a first wave of litigation. (Biosimilar producers have the option of choosing whether to litigate the innovator’s patents all at once or in two phases.)

In recent years, much attention has been focused on the comparatively large number of patents being asserted against biosimilars – lawsuits involving AbbVie’s adalimumab product, Humira, being the best-known example. According to drug advocacy group I-Mak, AbbVie filed 200 US patent applications relating to the franchise, acquiring 132 granted patents, many of which have been asserted against biosimilar competitors.

AbbVie has indeed identified a large number of patents that it believes have been infringed by each of the three approved adalimumab biosimilars that it has litigated against under the Biologics Price Competition and Innovation Act. According to Goodwin Procter’s recent Guide to Biosimilars Litigation and Regulation in the US (2019-2020 edition), AbbVie listed 67 patents, 74 patents and 86 patents against Amgen’s Amjevita, Boehringer Ingelheim’s Cyltezo and Sandoz’s Hyrimoz, respectively. With the biosimilars preferring to litigate some of these rights in a second wave, it then asserted 10, eight and two patents in initial rounds of litigation.

Other reference product sponsors have also asserted substantial patent thickets. Genentech listed between 36 and 40 patents in each of its four patent dances regarding imitation trastuzumab, asserting between 20 and 37 rights in each case. It also asserted more than 20 patents in each suit against biosimilar versions of rituximab and bevacizumab.

However, several litigations in this area have involved only small numbers of patents. In its two infliximab lawsuits, Janssen asserted two patents (of six listed rights) against Celltrion and three patents against Samsung Bioepis. Similarly, Amgen asserted just one or two patents in six of seven suits against producers of filgrastim/pegfilgrastim biosimilars. Moreover, it listed three rights in its patent dance with epoetin alfa imitator Hospira, before asserting two patents in litigation.

This disparity likely reflects the fact that infliximab and filgrastim/pegfilgrastim are older biologics, many of whose patents have now expired.

Loh, Valenti and Zheng

Left to right: Christopher Loh of Venable, Alexandra Valenti of Goodwin Procter and Limin Zheng of Miclean Gleason.

Participation in the patent dance

Biosimilar producers also have the choice of whether to participate in the patent dance process at all. This was confirmed by the Supreme Court’s 2017 decision in Sandoz v Amgen, which held that biosimilars cannot be compelled to supply manufacturing information to the reference product sponsor along with its aBLA.

Overall, participation in the patent dance has been high so far, with applicants engaging in all but four cases. However, in another four cases, biosimilars have participated but refused to provide additional manufacturing information. Only in the adalimumab suits have imitators opted for two-phase litigation.

Patent dance strategies seem to correlate to the number and type of IP rights protecting the relevant reference product. “The Biologics Price Competition and Innovation Act lawsuits we have seen so far can be divided into two categories,” comments Christopher Loh of Venable.

“The first category includes cases involving mature biologic products, such as filgrastim and epoetin, whose basic composition of matter patents and regulatory exclusivities had expired before the litigation started,” he explains. “These cases have tended to involve manufacturing patents filed later on in the product’s lifecycle. Because there was no regulatory exclusivity when the biosimilars were approved, the biosimilar producers took a relatively aggressive approach in interpreting the act’s patent dance provisions.”

Loh maintains that they did this in order to shorten the lengthy process laid out in the statute. “I think that this tendency to want to speed through the litigation is also spurred by the fact that the Biologics Price Competition and Innovation Act provides for no automatic stay of approval once litigation is brought.”

The second category that Loh identifies is that where the reference biologic had a lengthy period of regulatory exclusivity remaining after the passage of the act. “In these cases, exclusivity incentivised both sides to participate in the patent dance. This allowed the biosimilar producers to gain some intelligence about the innovators’ patent portfolios, without any downside in terms of delay to launch date.”

Robert Cerwinski of Goodwin Procter makes a similar point but emphasises the number of patents involved. “When there are only a few patents and they are well known, those are the cases in which the biosimilar declines to take part… The patent dance takes a lot of time and is expensive. If it can be avoided without much loss, people will do that.”

He continues: “When there are more patents, and there is more uncertainty, then people engage in the patent dance.” Only in the extreme case of adalimumab have biosimilars faced such a large body of patents that they have considered it an advantage to split the litigation into two phases.

Figure 1. Number of biosimilar litigation complaints filed since 2014

Figure 1. Number of biosimilar litigation complaints filed since 2014

 

Table 1. Biosimilars litigated under the Biologics Price Competition and Innovation Act and their applicants

MoleculeLitigated biosimilarBiosimilar applicant
Filgrastim and pegfilgrastimZarxio, ZiextenzoSandoz
Lapelga, GrastofilApotex
UdenycaCoherus Biosciences
FulphilaMylan
TPI G-CSFKashiv Biosciences
Nivestym and proposed pegfilgrastim biosimilarHospira
TX-01Tanvex BioPharma
InfliximabInflectraCelltrion
RenflexisSamsung Bioepis
Epoetin alfaRetacritHospira
EtanerceptErelziSandoz
EticovoSamsung Bioepis
AdalimumabAmjevitaAmgen
CyltezoBoehringer Ingelheim
HyrimozSandoz
BevacizumabMvasiAmgen
ZirabevPfizer
TrastuzumabTrazimeraPfizer
HerzumaCelltrion
KanjintiAmgen
OntruzantSamsung Bioepis
RituximabGP2013Sandoz
TruximaCelltrion

The future of the patent dance

Despite the flexibility that biosimilar producers have, participation in the dance is only likely to grow in years to come, according to Loh.

“The incentive to shorten the Biologics Price Competition and Innovation Act timeline is probably going to decrease as we get into a third wave of litigation,” he argues. “This is because there will be full periods of regulatory exclusivity for many of the reference products involved. With that timeline, more parties will be inclined to go through the entire act timeline as it was originally intended. With so much runway, there will not be much incentive to rush.”

This thought is echoed by other professionals. “If development timelines can be made to work, biosimilar producers could in the future be filing their FDA submission a long time ahead of their target launch date, and well before the composition of matter patent expires on the branded product,” points out one in-house counsel for a large biosimilar drug company. “This means that they will get into litigation early and gain a clearer sense of what secondary patent protection exists and its merits.”

Litigation settlements

A striking trend in this early litigation has been the high rate of settlements. So far, 11 cases have involved settlement agreements (AbbVie has also reached settlements with six other pre-aBLA biosimilars), while decisions on the merits have been relatively few.

This may reflect the litigation risks faced by both innovators and biosimilar producers. Reference product sponsors have “not really wanted to proceed with adjudication on the merits, either in a preliminary injunction or in a district court action”, says Cerwinski, citing many of the cases involving the biggest reference products to date, including adalimumab, trastuzumab and rituximab.

“The timing of settlements has been at the run-up to a preliminary injunction hearing, or in the case of adalimumab, some key discovery happening,” he continues. “Rather than risk the patent and biosimilar entry, the reference product has been willing to settle.”

The legal and commercial risks facing biosimilar litigants are perhaps even more significant. With the high cost of developing biosimilars (estimated at around $200 million per drug) and the difficulty in winning market share from the original product, there is great pressure to ensure that products reach the market early compared to other imitation products.

“Biosimilar producers want fast clarity,” one corporate lawyer at an international generic business told IAM. “Whatever strategy will get you to clarity the quickest will by and large be the approach that is adopted. Because of the costs and challenges surrounding biosimilar development, companies are often prepared to take a deal in order to gain certainty over the launch date – even if this means waiting to launch – rather than to risk litigation. So much has been invested that they need to succeed somehow.”

There is a big incentive to be the first biosimilar to market, comments another in-house counsel. “If you are second or third to market, the pharmacy benefit managers may have already done their contracting for the year and you may be cut out for a few months.” Then there is the risk that the market will form without you. Further, “if you are fifth or sixth to market, your commercial strategy will become dependent on lowering the price, in which case you may struggle to make back your investment”.

Ambiguity in the law regarding biologics patents makes litigation more uncertain and expensive, adds Limin Zheng of Miclean Gleason. “Biologics patent litigation is more complex, not only because of the relatively new statute, but also because there is more to argue on the substantive issues regarding infringement (eg, the doctrine of equivalents and enablement). This leads to more settlement, because litigation is more costly and both sides have a lot to lose.”

However, commercial pressures to get to market ahead of other biosimilars may mean that some companies refuse to settle, in the hope that more tenacious litigation may help them to achieve an earlier launch date.

An interesting example of this approach was that taken by Boehringer Ingelheim, which continued to fight AbbVie’s patent suit longer than all the other adalimumab biosimilars. Despite being last to settle, it was granted the third best launch date of nine biosimilars.

“Boehringer Ingelheim did not want to settle to be behind Coherus,” points out Cerwinski. “It decided it would be aggressive in litigation and said to AbbVie: ‘You are going to give us a better date, because if you do not, we will litigate this to the merits.’ Amgen is now trying this with trastuzumab. It is an interesting story to watch play out.”

“That situation was a by-product of the fact that Humira is such a blockbuster,” notes Alexandra Valenti, also of Goodwin Procter. “Whether so many biosimilars will target the same molecule again is not clear.”

The pair agree that the fact that trastuzumab has several biosimilars is one of the main reasons why Amgen has decided not to settle yet. “For litigants who have an appetite for launching at risk, and who are able to do that, it will be a valuable weapon in their arsenal, especially if there are a lot of previous settlements and they are a little late to the FDA,” Cerwinski says.

At-risk launches

Writing for IAM in 2018, healthcare economists Richard Mortimer and Brian Ellman of Analysis Group argued that so-called ‘at-risk’ launches may occur more frequently in Biologics Price Competition and Innovation Act litigation than in Hatch-Waxman suits. They maintained that the lack of a 180-day exclusivity period for the first generic and the increased importance of being the first imitator to market create greater incentives for copycat biologics to consider launching during litigation.

Early trends lend tentative support to Mortimer and Ellman’s thesis. Of the 12 launches of biosimilars challenged in Biologics Price Competition and Innovation Act litigation, seven have occurred during the pendency of district court patent litigation. These launches have involved four separate molecules – filgrastim/pegfilgrastim, infliximab, bevacizumab and trastuzumab – and have taken place under a variety of different circumstances. “Not all at-risk launches are equal,” says Cerwinski. “They seem to be divided into two categories with different risk profiles.”

“Some of the launches came in cases where there were fewer patents involved and/or some patents had been adjudged invalid or not infringed – like the filgrastim/pegfilgrastim and infliximab launches,” he explains.

The other launches (which happened in August 2019) concerned Amgen’s biosimilar versions of bevacizumab and trastuzumab, which have had larger numbers of rights asserted against them. In both cases, the patentee, Genentech, was denied a preliminary injunction by a district court for fairly distinctive reasons.

In the trastuzumab litigation, this was because Genentech failed to establish that it would suffer irreparable harm, having left it too long to file for an injunction. In the bevacizumab case, the district court refused to accept Genentech’s claim that Amgen’s notice of commercial marketing was ineffective because it had filed subsequent supplements to its aBLA. Both decisions are being challenged at the Court of Appeals for the Federal Circuit.

“I think that one of the things to look out for is whether Amgen and Genentech reach a settlement that preserves some significant value for Amgen in its jump-the-line, launch-at-risk strategy,” notes Cerwinski. “This is a test case in a high-stakes, launch-at-risk strategy.”

“It is difficult to predict what will happen,” agrees Alexandra Valenti of Goodwin Procter. “But to the extent that biosimilars are able to jump the line by launching at risk, it could be worth doing. Even if there is still the danger of damages being owed to the patentee, it may be that the economics work out because you got to market first.”

 

Developments to watch out for

Genentech v Amgen

The disputes between the two companies concerning Amgen’s biosimilar versions of bevacizumab and trastuzumab are by far the most interesting of the ongoing patent suits. The outcome of Genentech’s appeals to the Federal Circuit about the denial of preliminary injunctions in both cases (but for different reasons) could have important repercussions for enforcement in the biologics space. How Amgen’s high-risk, launch-at-risk strategy fares in these disputes may affect the approaches adopted by other biosimilars in the future.

Formation of adalimumab and trastuzumab biosimilar markets

There is still very little data about how the US market for a biologic product changes when a large number of biosimilars are launched – and how each of the biosimilars performs depending on its relative entry date. The commercial success or failure of the various biosimilars set to enter the adalimumab and trastuzumab markets in the years to come will be instructive for future patent strategies among imitators. For example, it may give more insight into the importance of getting to market first rather than second, or second rather than third, thereby guiding decisions to settle, continue litigation or launch at risk.

Disputes over skinny labels

“The ability to launch skinny-label products may be an issue in the future,” says one associate general counsel in-house at a global biosimilars business. “There will be challenges with regard to commercialising a skinny-label product and avoiding allegations of off-label infringement or inducement to infringe. We do not yet have clarity on how these apply in the biosimilars context. Also, under the Biologics Price Competition and Innovation Act, the biosimilar is responsible for crafting its own label, which creates potential problems and means that you have to work closely with your regulatory and marketing teams.”

Unclean hands defence

In its dispute with AbbVie, Boehringer Ingelheim made the first ever ‘unclean hands’ defence against a patent thicket or thicketing strategy. It argued that AbbVie’s Humira strategy constituted a “global effort to improperly delay competition with respect to adalimumab”; therefore, it was not entitled to remedy under the unclean hands doctrine, which bars relief to parties engaged in “fraud, deceit, unconscionability, or bad faith”. Owing to a subsequent settlement, this argument was not judged on the merits, but given the large patent estates guarding many key biologics franchises, it will be interesting to see whether it is raised again in future suits.

Second-wave litigation 

So far there has only been one Biologics Price Competition and Innovation Act dispute involving a second wave of litigation (Amgen v Apotex concerning pegfilgrastim). Many questions remain regarding the rules for such additional rounds of litigation under the act. As Goodwin Procter’s guide points out, it is not yet clear whether a reference product sponsor can file a second suit at any point during the 180 days’ notice of commercial marketing provided by the biosimilar. Can it wait until the very end of that period? And can the imitator seek declaratory relief in the meantime?

Federal court rulings

In the relatively small number of cases where there has been a decision on the merits in a federal court, biosimilars have fared quite well. As already noted, Sandoz prevailed against Amgen at the Supreme Court on the question of whether biosimilars are obliged to participate in the patent dance. Amgen has also been beaten in four of its filgrastim/pegfilgrastim litigations, against Sandoz, Apotex, Coherus and Mylan.

Further, Janssen’s two asserted infliximab patents were found to be either invalid or not infringed in its suit against Celltrion. Meanwhile, Genentech was denied preliminary injunctions when Amgen launched its versions of bevacizumab and trastuzumab at risk.

“There have been very few substantive rulings on validity in Biologics Price Competition and Innovation Act litigation, which is another big departure from Hatch-Waxman proceedings, where validity is often the key issue,” comments Valenti. “In those exceptional cases that have been litigated to the merits, we have seen non-infringement victories for the biosimilar manufacturers more than you would see in Hatch-Waxman litigation.”

However, most decisions on the merits have so far related to drugs with relatively small patent estates. What is more, there have been notable victories for patentees too. For example, Amgen was awarded $70 million damages when one of its epoetin alfa patents was found to be infringed by Hospira – a decision recently upheld by the Federal Circuit.

Biosimilar versus biosimilar suits

While not regulated by the Biologics Price Competition and Innovation Act litigation framework, the number of biosimilar versus biosimilar patent disputes is likely to increase in the future. In order to design around the large patent estates owned by reference product sponsors, and to give themselves a competitive advantage relative to fellow imitators, biosimilar producers are themselves making large numbers of patentable inventions relating to manufacturing processes and drug formulations.

Therefore, acquiring and enforcing patents will be an important strategic consideration for companies seeking to imitate biologics, in contrast to producers of generic small-molecule drugs. Moreover, biosimilar producers will need to avoid infringing patents owned by other biosimilar companies, as well as reference product sponsors.

“Companies need to look seriously at their competitors’ intellectual property,” insists one in-house patent counsel at a major generic/biosimilar business. “Biosimilar producers are inventing new manufacturing processes and formulations as part of their development processes – often to work around the reference products’ formulation patents – and are applying for patents. So, in many cases, there will be biosimilar IP rights that you need to be aware of.”

The first all-biosimilar US patent suit was filed in February 2019 by Coherus BioSciences, which accused fellow adalimumab imitator Amgen of infringement. Having just reached a pre-aBLA settlement with AbbVie regarding its candidate, CHS-1420, Coherus claimed that Amgen’s European Amgevita biosimilar (manufactured in the United States) infringes three of its formulation patents.

In launching the action, Coherus CEO Denny Lanfear commented that his company had “recognised early on the central role intellectual property would play in advancing biosimilars to market… we believe in the strength of our IP and we intend to protect it”.

While this suit was settled in late-November last year, the pressures under which biosimilars operate make similar disputes highly likely in the years to come. And, although the scant case law provides only limited guidance for future innovator versus biosimilar litigation, it does appear that this area will continue to be shaped to a significant extent by competition between biosimilars producers.

Action plan

Since the first US litigation involving an innovative biologic and a biosimilar was launched in 2014, there has been dramatic rise in the number of such suits, a trend that is likely to result in some of the most commercially important biopharma patent disputes in the coming years. Early trends have emerged that help to ascertain the tactics and strategies that will characterise future Biologics Price Competition and Innovation Act litigation, including the following:

  • There has been a stark difference between approaches adopted in cases involving two categories of innovative drug, namely:
    • older biologics franchises protected by fewer active patents; and
    • blockbuster drugs protected by large patent thickets.
  • Biosimilars have made use of flexibilities surrounding the so-called ‘patent dance’. While participation has been generally high, some imitators have refused to partake in the dance and others have omitted manufacturing information. Imitators have sought to avoid second waves of litigation.
  • There has been a large number of at-risk launches, especially in cases involving drugs protected by fewer patents, as well as by Amgen with its trastuzumab and bevacizumab biosimilars. The outcome of Amgen’s high-risk strategy may influence future approaches to market launch.
  • The risks facing both innovators and biosimilars have produced a large number of settlements and decisions on the merits have been few and far between. However, pressures on imitators to enter the market before their biosimilar rivals may see more aggressive litigation tactics adopted in certain circumstances.
  • More biosimilar versus biosimilar disputes are likely to emerge.

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