Shire ‘Confident’ in Fighting Hayman After Victory Over Actavis

Shire Plc is “confident” it will prevail against a U.S. hedge fund’s challenge to its drug patents after winning a similar fight with Actavis Plc, according to an intellectual-property attorney for the Dublin-based company.

Shire’s patent for its ulcerative colitis drug Lialda was deemed valid in a trial in Florida in 2013, which then prohibited Watson, now part of Actavis, from introducing a generic version.

Hayman Capital Management, a Dallas-based investment fund led by Kyle Bass, is challenging patents on Lialda and Gattex, which together would have made up 12 percent of Shire’s revenue in 2014. The Watson trial demonstrated the strength of Shire’s patent on Lialda, which expires in 2020, said David Banchik, an intellectual property lawyer at Shire.

“That was a full-scale victory for Shire,” Banchik said in a phone interview Tuesday. “We remain confident that the patent is going to be upheld.”

Three other companies -- Mylan NV, Zydus Pharmaceuticals Inc. and Osmotica Pharmaceutical Corp. -- have also been unable to get their generic versions of Lialda approved by U.S. regulators, leaving the market without any generic copies, he said.

Hayman’s petition was filed with the U.S. Patent and Trademark Office, which has 6 months to decide whether to begin a so-called Inter Partes Review procedure, which is designed to conclude 12 months from that date, Banchik said.

The Inter Partes Review procedure was created as a quick and relatively inexpensive way for technology companies and retailers to deal with so-called patent trolls -- a pejorative for certain patent-licensing firms that file a large number of suits over things like the use of Wi-Fi or common software functions in hopes of an easy payout.

Competitors’ Hurdles

Lialda’s active ingredient, mesalamine, is the same as its older drug for ulcerative colitis, Pentasa. While that drug lost patent protection in 2002, no competitor has been able to introduce a generic version, which makes a strong case for Shire in defending the Lialda patent, Jefferies analysts wrote in a note to investors Tuesday.

Banchik declined to comment on whether Shire is working with the industry trade group, Pharmaceutical Research and Manufacturers of America, on the case or with an outside law firm.

Shire also faces challenges to its patents on Lialda by the generic drugmakers. A trial against Mylan is set to begin Sept. 1, while dates have not yet been fixed for cases against Osmotica and Zydus, Banchik said.

On the challenge to Gattex, Hayman’s petition only addresses a subset of claims of the drug’s patent expiring in 2022, without addressing those expiring in 2015 and 2025, Shire said in a statement on Monday. Shire acquired NPS Pharmaceuticals Inc., maker of Gattex, earlier this year in a deal valued at about $5 billion.

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