The Rules Of Engagement For Biosimilar Legal Battles

These are formative days for biosimilar developers in the U.S. courts. Last month, the biosimilar market witnessed its first legal settlement, between Mylan and Genentech for trastuzumab, and further settlements are sure to follow. On April 26, the Supreme Court began hearing the case between Amgen and Sandoz regarding the infamous “patent dance.” The Court’s ruling (expected in July) will have significant ramifications on how quickly new biosimilars reach the market.

Given the current climate, Biosimilar Development reached out to three attorneys with experience in the space: Patrick Gallagher of Duane Morris, Terry Mahn of Fish & Richardson, Lawrence Sung of Wiley Rein. In this three-part Q&A article series, these experts share their insights on recent and upcoming legal actions of importance, emerging litigation strategies, best practices for biosimilar companies in addressing legal challenges, and related topics.

Part 1 projected likely outcomes of the Supreme Court case. In Part 2, the discussion of Amgen v. Sandoz continued, and transitioned into a conversation about recent and potential settlements in the biosimilars market. Finally, our experts talk about the patterns that are beginning to emerge in biosimilar patent skirmishes — and how biosimilar developers should prepare their defense.

Are there any particular litigation strategies or patterns emerging in the biosimilar industry that have you particularly concerned? Why are they concerning?

Terry Mahn, Fish & Richardson: While there have only been a limited number of Biologics Price Competition and Innovation Act (BPCIA) litigations to date, it is notable that some biosimilar participants are choosing to dance, but for only half the song. In other words, biosimilar applicants begin the patent dance procedures but waive subsequent steps in the dance. For example, in the Immunex v. Sandoz dispute involving a biosimilar of Enbrel, Sandoz waived its right to receive a statement by Immunex pursuant to 42 USC 262(l)(3)(C) and declared negotiations pursuant to 262(l)(4) and (5) regarding the list of patents to be litigated were unnecessary. Sandoz then insisted Immunex file suit within 30 days. Sandoz behaved similarly in its litigation with Amgen involving its biosimilar of Neulasta.

The ability of a party to waive steps of the dance appears to be an attempt to speed up the patent dance process. Regardless of whether or not the Supreme Court finds the patent dance optional or not, it remains unclear how much compliance with the dance provisions is sufficient.

Patrick Gallagher, Duane Morris: It is too early in the game to start seeing strong patterns. The first cases are just now working their way through the court system, and by and large those cases have focused on procedural issues and interpretation of the statute to figure out what the statutory pathway even requires. As those procedural issues are resolved, providing more certainty about the regulatory pathway, more companies should be willing to jump into the biosimilars arena, leading to more competition for biosimilar products.

Lawrence Sung, Wiley Rein: The BPCIA framework unwittingly facilitates a degree of gamesmanship with respect to the patent information exchange process. The BPCIA allowance of a reference product sponsor to assert newly in-licensed patent rights during the patent information exchange against the biosimilar applicant condones using the element of surprise as a litigation tactic. For example, a reference product sponsor may have strategic business partnerships where the licensing of patents relevant to the biosimilar manufacturing does not manifest until the reference product sponsor receives the biosimilar application and the patent dance has begun. Because the current BPCIA does not foreclose this competitive strategy, an unintended consequence is even greater secrecy in the business dealings of the biologics drug industry.

Is there anything biosimilar companies can do to ensure they adequately approach these legal challenges?

Gallagher: Be prepared for all potential outcomes. Don’t wait to develop a strategy for your biosimilar products on all fronts, including scientific, regulatory, and patent strategies. But be ready to be flexible in those strategies throughout the development process.

Mahn: Work with counsel in advance to determine your strategy going forward, which should take into consideration:

• Which side of the fence will you be on? If you envision working as a biologics manufacturer one day, your approach may be different. Arguments made from the point of view of an abbreviated biologics license application (aBLA) applicant may be used against you when you are in the position of a BLA holder.
• Understand how communications from your company — regulatory, Securities & Exchange Commission (SEC) filings, etc. — may clue in biologics manufacturers to the status of your aBLA, triggering lawsuits. For example, a biosimilar applicant may have a duty to inform its shareholders when it files aBLA applications and/or when the FDA accepts such filings for review, which would be a public disclosure. Any other press releases or announcements by the company could also provide information regarding the aBLA.

Sung: For now, it would be prudent for a biosimilars company to consider the relative merits of an aBLA versus a “full” biologics license application (BLA). Because it remains unclear what regulatory hurdles will attach, for example, the testing required to support a determination of interchangeability, it is arguably too soon in the evolution of the biosimilars industry to conclude which pathway will yield a better business outcome. The emergence of biobetters will further highlight this decision-making paradigm. Keeping as many options open as long as possible may be a practical rule of engagement in the biosimilars industry for the near future.