Novartis May Sell Copy of Amgen’s Neupogen Drug in September

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Novartis AG’s Sandoz unit may begin selling the first copy of Amgen Inc.’s cancer treatment Neupogen as soon as Sept. 2 after an appeals court ruling Tuesday rejected arguments that it failed to follow regulatory rules.

Sandoz didn’t violate the rules when applying to sell its drug, Zarxio, the U.S. Court of Appeals for the Federal Circuit in Washington said in an opinion posted on its electronic docket. It’s the first time the appeals court specializing in patent law has applied rules for copying drugs derived from living organisms.

The case centered on interpreting a 2010 law for approving copies of biologic drugs, known as biosimilars. Sandoz in March was the first company to get U.S. Food and Drug Administration approval for such a drug, and the appeals court decision will help guide other drugmakers’ applications.

The appeals panel ordered the case sent back to the trial judge in San Francisco to consider whether Zarxio infringes an Amgen patent for use of filgrastim, Neupogen’s active ingredient.

Amgen can still ask the judge to halt the sales until the patent-infringement claim is decided. Neupogen was first approved by U.S. regulators in 1991. The company declined to comment on its next steps.

Amgen fell less than 1 percent to $163.70 in Nasdaq Stock Market trading at 4 p.m. Tuesday. Novartis fell 2.3 percent to $103.71, after reporting a drop in second-quarter earnings.

Notification Question

Legislation authorizing the FDA to approve the biotech copycats passed Congress in March 2010, but regulators took years hashing out a series of steps to get biosimilar approval.

The steps, known as the “patent dance,” involve information-sharing and notifications, and Sandoz didn’t follow some of those steps. The question was whether the steps are mandatory -- Amgen said they are and Sandoz argued they aren’t. The trial judge agreed with Sandoz, as did the Federal Circuit.

Circuit Judge Alan Lourie, invoking Winston Churchill’s description of Russia, said the court’s task was to “do our best to unravel the riddle, solve the mystery, and comprehend the enigma” of the law.

The 46-page decision involved each of the three judges writing an opinion with Lourie writing for the majority and the other two agreeing with part and disagreeing with part.

Chen, Newman

Circuit Judge Raymond Chen said the decision that Sandoz couldn’t enter the market until Sept. 2 gives Amgen an “exclusivity windfall.” Sandoz had wanted to enter the market immediately, but conceded in oral arguments before the court that Sept. 2 might be the appropriate date.

Circuit Judge Pauline Newman backed Amgen’s arguments regarding the notification requirements.

“It remains to be seen how these rulings will affect future biosimilar applications,” said Anthony Insogna, a biotech patent lawyer with Jones Day. Still, he said, it gives “some much needed guidance from the Federal Circuit regarding the oft-criticized statute.”

The companies, in their comments, highlighted the parts of the case they won.

Amgen said in a statement the court “did not rule in our favor on all issues” but did ensure Sandoz couldn’t enter the market before September.

Sandoz said it was happy with the court’s ruling in its favor on the issue of the “patent dance” and “we look forward to launching Zarxio” on Sept. 2.

Testing, Manufacturing

Unlike a generic drug, which directly copies the recipe from the brand-name drug, developing a medicine based on a living organism involves greater testing and advanced manufacturing skills. A biosimilar piggybacks on some of the safety and efficacy tests of the drug that it’s copying, so it costs less to develop.

Neupogen is a therapy to help increase cancer patients’ white blood cell counts and fight infections. The drug generated $839 million in U.S. sales last year for Amgen. Sales have been falling as patients switched to a newer version of the drug, called Neulasta.

Since it’s the first case of its kind, a decision by the court will provide guidance for other would-be makers of biosimilars. They include Celltrion Inc., which is seeking to make a copy of Johnson & Johnson’s arthritis drug Remicade.

The case is Amgen Inc. v. Sandoz Inc., 15-1499, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Amgen Inc. v. Sandoz Inc., 14cv04741, U.S. District Court for the Northern District of California (San Francisco).

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