AMGEN AND GENETICS INSTITUTE DISCUSSING ROYALTY-FREE CROSS-LICENSING PACT; CHUGAI MAY HAVE PROBLEMS SUPPLYING U.S. MARKET, AMGEN SUGGESTS IN COURT FILING
Amgen and Genetics Institute have been working on a royalty-free cross-licensing agreement in order to resolve their long-standing erythropoietin patent dispute, Amgen acknowledged in a Feb. 6 response to an injunction filed by Genetics Institute in Massachusetts Federal Court. Arguing why damages should not be assessed at this time to either company, Amgen asserted that "the parties are currently negotiating for a settlement based upon royalty-free cross-licenses." Oral arguments on the injunction are scheduled for Feb. 14. Genetics Institute had requested the injunction on Jan. 30, citing an impasse in cross-licensing discussions. The lawsuit seeks the withdrawal of Epogen (epoetin-beta) from the market once Amgen's anticipated appeal of the Dec. 11 decision on the EPO patent dispute has been heard. In the meantime, Genetics Institute's request for an injunction would allow Epogen to remain on the market as long as Amgen deposits 75% of EPO sales into an escrow account ("The Pink Sheet" Feb. 5, T&G-1). Genetics Institute would also agree to do the same once Marogen (epoetin-beta) was introduced. Amgen argued in its response that neither company should be required to deposit damages during the appeal period. However, the company contended, "if monies are to be deposited pending appeal, an evidentiary hearing should be had to determine the proper measure of the deposit." Amgen's profits from the sale of EPO do not constitute 75%, the company maintained, and "imposition of a requirement to make deposits based on 'profits' may well force Amgen off the market." In its request for an injunction, Genetics Institute asked the court to require Amgen to certify that, as a result of an injunction, it would not be able to assure the availability of EPO to meet the needs of chronic renal failure patients. Amgen pointed out that "such a disclaimer, if ordered would be tantamount to destroying Amgen's orphan drug status." Amgen's orphan exclusivity for Epogen is still an obstacle for U.S. marketing of Chugai-Upjohn and Genetics Institute's Marogen. For Amgen to be required to certify that it might not be able to meet the needs of CRF patients would create a loophole for Chugai-Upjohn's Marogen (epoetin-beta) to circumvent Epogen's exclusivity. Amgen suggested, in turn, that the injunction should not be granted because the public interest would be endangered if Chugai were not able to provide the product. Even though Amgen's product would remain on the market if the injunction were granted, the product could be removed from the market after an appellate court decision. "There is no assurance," Amgen pointed out, "that Chugai will be licensed by the FDA, much less be in a position to supply all U.S. patients, before the decision on appeal comes down." Chugai's inability to show that it could supply the U.S. EPO market, Amgen said, "undermines all the requested injunctive relief." The company cited several difficulties Chugai might have in meeting the U.S. demand. Amgen maintained that findings in the Dec. 11 Boston court decision ("The Pink Sheet" Dec. 18, p.15) will allow the Patent & Trademark Office to move on the company's process patent for erythropoietin. The Boston court's findings, Amgen asserted, "now open the door for the U.S. Patent and Trademark Office promptly to grant additional patent rights to Amgen which Chugai, as well as G-I, will be infringing." The Amgen-Genetics Institute erythropoietin war took another turn when Amgen's '008 patent was published recently in Japan. In the response to the injunction request, Amgen argued that its Japanese patent "may well provide a further basis for preventing Chugai's continued manufacture at any Japanese plant of rEPO for export to the U.S." In addition, FDA's problems with Chugai's Japanese plant may hold up marketing of Marogen even if the PLA review is complete. Amgen pointed to an August inspection report (FD-483) of Chugai's Ukima and Fujieda plants in Tokyo noting that FDA had observed deficiencies including: "inadequacies of space required for proper operations; lack of validation of its water systems; and sterility concerns." Ukima produces the bulk product up to concentrate and Fujieda formulates and fills vials of finished Marogen product. In the FD-483, the agency inspector noted that the formulation and purification section of the Ukima plant "does not provide adequate space for the number of purification steps performed." The inspector also cited an "inappropriate use of work space," including the improper storage of in-process material and inappropriate design and location of collection vessels. The water-for-injection system "has not been validated," the inspector noted and "the hot loop is not continuous during production operations." Breach of aseptic practices cited in formulation of final product and in the filling and freeze drying process included observations such as: "purified concentrate not having thawed in an environmentally controlled area"; "loading of the product into the lyophilizer not performed under class 100 conditions"; and a "technician recording manufacturing inside the clean hood." A July 10 Chugai-Upjohn internal memo notes that the inspection of Chugai's plant was originally "delayed [until August] because of FDA's concerns about Chugai lyophilization/sterilization, filtration and purification processes." According to the memo, some FDA officials thought that "Chugai may need to make changes in their facilities." The memo notes that FDA formulated a "second round" of PLA/ELA questions prior to the inspection to "increase the FDA comfort level and avoid a premature inspection requiring a future inspection." Chugai-Upjohn has said it is engaged in an ongoing dialogue with FDA and is responding to the agencies manufacturing questions concerning the Japanese plant. FDA expects Chugai to meet the same standards as a domestic manufacturer. Another impediment Chugai could face is legislation recently introduced by Reps. Boucher (D-Va.) and Carlos Moorhead (R-Calif.) which would empower the International Trade Commission to bar importation of foreign products made with a component covered by a U.S. patent (see related item, T&G-2). Marogen is produced by host cells covered by Amgen's patent. Amgen joined Genetics Institute's motion for entry of final judgment on Magistrate Saris's Dec. 11 order validating portions of both patents. The firm indicated that it will most likely appeal the final decision, noting that the "extent of Amgen's infringement may depend upon claim constructions made by the Federal Circuit, and the measure of damages will depend upon whether and when Chugai can fully supply the market."
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