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Executive Summary

DANBURY's SIX-MONTH GENERIC EXCLUSIVITY FOR CYCLOBENZAPRINE would begin May 3, 1989, if the Delaware Federal Court agrees with the company's interpretation of the Waxman/Hatch act. Danbury has asked the court, which determined that Merck's Flexeril patent is unenforceable, to rule that only an appellate court ruling constitutes a final decision in a patent challenge under the law. The court may defer to FDA for an administrative interpretation. FDA granted Danbury a prospective ANDA approval to market generic cyclobenzaprine on May 3, 1989. The date is 30 months after Merck sued Danbury for patent infringement in response to the generic company's submission of an ANDA and patent challenge. Under the ANDA/patent law, a patent challenger must delay marketing for 30 months after litigation begins unless the court renders a final decision earlier. Although Danbury won its challenge of Merck's Flexeril patent at the trial court level "The Pink Sheet" Sept. 19, p. 10), Merck is appealing the case. The generic manufacturer believes that the effective ANDA approval date -- and the start of six-month generic exclusivity period -- should remain unchanged unless Danbury wins the appeal earlier. Cases in the Court of Appeals for the Federal Circuit (the appellate court for patent cases) generally average six to nine months in duration; therefore, the Merck appeal is likely to be decided within weeks of the effective approval date. Consequently, if it is determined that Danbury cannot go to market until May 3, the generic company need not choose between losing exclusivity or risking damages in the event of an adverse appellate decision. Under the Waxman/Hatch act, if a patent challenger goes to market and ultimately loses the litigation, it is liable for damages equal to profits lost by the patent holder. The litigants agreed that Merck's award to Danbury for attorneys fees and court costs should total $ 400,000. However, the court has not yet signed the order for the award, which is stayed pending the appeal. Merck says it expects to win on appeal and will sue to recover lost revenues if a generic cyclobenzaprine is marketed. In a Sept. 29 statement to "The Pink Sheet" on the Delaware Federal Court opinion, the firm said it "will appeal the court decision that the company's patent . . . is valid but unenforceable. Merck expects to win the appeal and would then sue any patent infringer for lost revenues." Merck noted that Judge Murray Schwartz "found that Danbury had failed to prove that the invention would have been obvious" to pharmacological experts at the time the patent was granted. "Accordingly, he concluded that Merck's patent was valid." However, the statement continues, "Schwartz also found that Merck had engaged in inequitable conduct in its dealings with the Patent Office, and as a consequence the judge held the patent was unenforceable." The "inequitable conduct" involved the withholding of information that cyclobenzaprine is chemically related to amitriptyline (Merck's Elavil) and that it produces drowsiness. Merck told "The Pink Sheet" that it did not submit to the U.S. Patent & Trademark Office what it knew about amitriptyline "only because the company believed that information to be immaterial to the questions that govern patentability." Regarding the assertion involving drowsiness, Merck said it made only one reference to the side effect during the patent application process: "Cyclobenzaprine would be an effective agent for treating muscle spasm or spasticity without the attendant side effect of depression or causing muscle weakness and drowsiness." The company told "The Pink Sheet" that it "knew and revealed to the FDA during the NDA process that drowsiness is a possible side effect but that was not inconsistent with the position taken by Merck before the PTO that cyclobenzaprine does not cause the combination of drowsiness and weakening of normal muscle" (emphasis added). The firm said it "consistently and correctly stressed the selective nature of the invention -- namely, that cyclobenzaprine relaxed hypertonic muscles without causing any loss in normal muscle strength, behavioral effects or other effects ordinarily associated with other central nervous system depressants."

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