Bristol-Myers Partner Otsuka Wins Abilify Ruling
Stock Chart for Bristol-Myers Squibb Co (BMY)
Bristol-Myers Squibb Co. partner Otsuka Pharmaceutical Co. won a court ruling that will prevent generic versions of the schizophrenia treatment Abilify from entering the U.S. market until April 2015.
U.S. District Judge Mary L. Cooper in Trenton, New Jersey, upheld a patent that covers aripiprazole, the key ingredient in the drug. Tokyo-based Otsuka discovered the drug and co-markets it with New York-based Bristol-Myers in the U.S. and Europe.
The ruling is a loss for companies seeking to sell generic versions of the medicine, including Teva Pharmaceutical Industries Ltd., Novartis AG’s Sandoz; Apotex Inc.; Sun Pharmaceutical Industries Ltd. and Synthon BV. Bristol-Myers’s sales of Abilify were $1.86 billion in the nine months ended Sept. 30, the company said in an Oct. 26 statement. The drug accounted for about 14 percent of company sales last year.
“This is an important product for Bristol, and from that standpoint, this is definitely a positive development,” Linda Bannister, an analyst at Edward Jones & Co. in Des Peres, Missouri, said in a phone interview. “Usually these decisions stand, so it looks like we won’t have a generic until 2015.”
Bristol-Myers rose 30 cents to $26.32 at 4:15 p.m. in New York Stock Exchange composite trading. The stock is up 4.2 percent this year. Otsuka is closely held.
Most investors were anticipating a ruling in favor of Bristol-Myers and Otsuka, Seamus Fernandez, an analyst with Leerink Swann & Co. in Boston, said in a note to investors. A loss of patent protection for Abilify would have cut Bristol- Myers earnings by about 40 cents a share through 2014 because of the generic competition, Fernandez said.
Bristol-Myers and Otsuka are pleased with the court’s decision, said Sonia Choi, a spokeswoman for Bristol-Myers. Representatives of generic-drug makers Teva and Novartis declined to discuss the ruling. Officials with the other companies didn’t return messages seeking comment.
Abilify is the sixth-biggest selling drug in the U.S., Otsuka said in a Nov. 11 court filing. Teva and Apotex told the court in a filing the same day that the drug was already covered by a patent that expired in 2005. The medicine was first approved by U.S. regulators in 2002.
“Otsuka has been able to extend its patent monopoly on aripiprazole for almost an additional decade,” the generic-drug makers said. “Otsuka is not entitled to extend its period of exclusivity by obtaining a claim in a later patent that is, as here, merely an ‘obvious modification’ of a claim in an early patent.”
Otsuka called that position “absurd” and said that the compound is “patentably distinct” from the earlier compound.
“Although scientists have been trying to replicate aripiprazole’s unique properties since at least 1994 (when aripiprazole’s successful clinical results were published), no other antipsychotic drug like aripiprazole has been discovered to date,” Otsuka said in the filing.
Considering the state of known science in 1988, it wasn’t clear that researchers should look at the compound Otsuka selected when it was seeking an antipsychotic drug that had fewer side effects, Judge Cooper said in her ruling.
“The evidence of failure of researchers to develop a safe and effective atypical antipsychotic as of Oct. 31, 1988, supports a finding that aripiprazole would not have been obvious,” the judge said.
Cooper went through the history of schizophrenia treatments and the different compounds that are on the market.
“She spent a lot of time on this matter,” said James Monroe, a lawyer at Finnegan Henderson in Washington who represented Otsuka and said he was “ecstatic” at today’s decision. “She gave very close consideration” to the arguments presented by both sides.
The generic-drug makers also accused Otsuka of making false statements and failing to provide important research papers to the U.S. Patent and Trademark Office to obtain the patent, an allegation Otsuka denied.
Cooper said the information wasn’t material to the patent application, nor was there any intent on Otsuka’s part to mislead the agency by not providing the papers.
The lead case is Otsuka Pharmaceutical Co. v. Sandoz Inc., 07cv1000, U.S. District Court for the District of New Jersey (Trenton).
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