Abbott Challenges $1.67 Billion Patent Loss to J&J Over Humira

Abbott Laboratories urged a U.S. appeals court to throw out a $1.67 billion patent-infringement verdict, the largest in U.S. history, set after a jury found the company used Johnson & Johnson’s technology to develop the arthritis drug Humira.

Abbott is focusing its appeal on the validity of the patent, co-issued to New York University and J&J’s Centocor unit. Humira, Abbott’s biggest drug, includes human antibodies that aren’t covered by the patent, a lawyer for the Abbott Park, Illinois-based company said.

“It was Abbott who invented the first fully human antibody” used to treat arthritis, William Lee of WilmerHale in Boston told the U.S. Court of Appeals for the Federal Circuit in Washington today. Abbott also contends that even if the verdict is upheld, the damage award is excessive.

A federal jury in Marshall, Texas, in June 2009 said the company owed $504 million in patent royalties to J&J based on sales of Abbott’s Humira arthritis drug, plus $1.17 billion to compensate J&J for decreased sales of its competing treatments. The trial judge later added $175.6 million in interest, bringing the total to $1.84 billion.

Humira generated $4.67 billion in sales in the first nine months of the year, 19 percent of Abbott’s total revenue, the company reported Oct. 20. That includes $2 billion in U.S. sales, a jump of 14 percent from the year-ago period.

“The damage award was as large as it was because the infringing product, Humira, is as big as it is,” Dianne Elderkin, a Centocor lawyer at Akin Gump in Philadelphia, told the three-judge panel.

$19,000 Drug

Humira, which costs about $19,000 a year, blocks action of tumor necrosis factor, or TNF, which is linked to inflammation.

Abbott said the patent doesn’t cover the human antibodies that are used in Humira, and they are invalid because scientists couldn’t make fully human antibodies against TNF in a laboratory in 1994, the date set by the court as the time of the invention.

In 1994, “no one anywhere on the face of the earth had a fully human antibody” that would work against TNF, Lee said. “A lot of people tried and they had failed. How can you have a written description that says you have something that you don’t even know exists?”

J&J sells the competing medicine Remicade, made with a combination of mouse and human antibodies. J&J and NYU contend the patent covers both the combination and fully human antibodies against TNF. When the body produces too much TNF, it can cause the immune system to attack healthy tissue and leads to inflammation.

Simponi, Stelara

“What was invented here was a specific class of antibodies,” Elderkin said. Abbott’s expert witness at trial made the same arguments as Lee today and the jury “rejected his testimony.”

Abbott has filed its own lawsuit against Centocor, claiming J&J’s arthritis drug Simponi, made with human antibodies and first sold last year, is infringing an Abbott patent. It also claims a J&J psoriasis medicine, Stelara, violates two other patents. Those cases are pending in federal court in Worcester, Massachusetts.

The case is Centocor Inc. v. Abbott Laboratories, 10-1144, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Centocor Inc. v. Abbott Laboratories, 07cv139, U.S. District Court, Eastern District of Texas (Marshall).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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