Teva Loses Decision on Validity of Third Copaxone Patent

Updated on
  • Mylan, Amneal win patent office ruling on Teva’s MS drug
  • Two other patents were already deemed invalid by U.S. agency

Teva Pharmaceutical Industries Ltd. had a third patent on its top-selling multiple sclerosis drug, Copaxone, invalidated Thursday by a U.S. agency, a further blow to its bid to block generic versions of a drug that accounts for 20 percent of its revenue.

The Patent Trial and Appeal Board sided with Mylan NV and Amneal Pharmaceuticals LLC in ruling that the patent covering the drug’s thrice-weekly dosage never should have been issued. Teva’s next step is to ask the board to reconsider that decision, and to petition an appeals court that specializes in patent law.

The ruling is a further strike against Teva -- the board previously said two other patents regarding the dosage were also invalid. It could make it harder for the company to fend off generic-drug challengers to a medicine that generated $4 billion in 2015 sales, with $3.3 billion of it in the U.S.

Teva has a total of five patents expiring in 2030 that cover ways to administer the drug in a 40-milligram dosage three times a week. The original version of Copaxone, consisting of 20 milligrams taken every day, began facing generic competition last year.

Fourth Patent

A fourth patent was unsuccessfully challenged by Mylan, though a petition filed by Amneal is pending. The fifth patent was issued Aug. 2. All five are similar in scope, but Teva is hoping there are enough differences that the failure of the first three before the agency doesn’t presage what happens to the others.

The Israel-based Teva only needs one of the patents to survive a challenge to block competition from generic-drug makers, said Aude Gerspacher, an analyst with Bloomberg Intelligence. The U.S. Food and Drug Administration can’t approve any generics until early 2017, so settlements are unlikely before then, she said.

Teva’s “most prudent course of action” would be to settle with Novartis AG and Momenta Pharmaceuticals Inc., Jason Gerberry, an analyst with Leerink Partners, said in a note to clients Wednesday. Novartis and Momenta already jointly sell a cheaper version of the daily shot. Even with the generic-drug competition, Teva has been able to maintain sales by switching about 80 percent of patients to the 40-mg injection.

Generic Version

Mylan has said it believes it’s one of the first companies to apply to sell a generic version of Copaxone, which would give it 180 days of marketing exclusivity.

“Through significant investment in research and development, and by challenging these invalid patents, we are working to bring a more affordable generic alternative of Copaxone to market,” Mylan Chief Executive Officer Heather Bresch said in a statement. She said the company is “pursuing all avenues” to challenge the fourth patent on the drug.

Amneal is also seeking approval to sell the 40-mg version, as are Novartis and Momenta. Because of the complex nature of the drug, it took Momenta seven years to get regulatory approval for the 20-mg versions, which is why Leerink’s Gerberry called the Novartis/Momenta proposal the “most credible generic threat.”

Stock Moves

Momenta rose as much as 3.9 percent on the news before retreating, ending the day up 1.1 percent at $12.15. Teva rose 1 percent to $50.90 and Mylan fell 1 percent to $41.92.

Analysts have said generic competition to the 40-mg version could wipe out as much as $3.2 billion in Copaxone sales by 2019.

The patent office isn’t the only place where the patents are being challenged. A September court trial is scheduled in Wilmington, Delaware, in the civil case Teva filed, with a ruling expected in early 2017. That case involves four of the patents. It’s harder to invalidate a patent in district court than in the patent office.

No matter what happens in either the patent office or court, the final word regarding the patents will come from an appeals court in Washington that specializes in U.S. patent law, most likely in about 2018.

Most generic-drug companies will wait until the U.S. Court of Appeals for the Federal Circuit issues its decision before entering the market. Otherwise, they could be forced to compensate Teva for any lost profits, which can be higher than what the generic-drug maker brings in from sales of its own lower-cost drug.

Teva knows the danger that a so-called “at risk” launch can pose. In 2013 it had to pay Pfizer Inc. $1.6 billion because it began selling a generic version of the heartburn drug Protonix in 2008, only to lose the patent dispute two years later.

— With assistance by Yaacov Benmeleh, and Catherine Larkin

(Updates with Mylan comment in ninth paragraph.)
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