Pfizer Avoids Settlements, Scores Third Patent Victory In As Many Months

Pfizer completed a patent litigation hat trick with its successful defense of a generic challenge to Norvasc , proving itself an exception to the recent industry trend of settling patent suits.

In a Jan. 18 order, a Chicago federal court judge ruled to uphold Pfizer's patent covering calcium channel blocker Norvasc, enjoining Apotex from marketing a generic equivalent for nearly two years.

The decision comes less than a month after Pfizer prevailed in a similar challenge to its blockbuster statin Lipitor and two months after the firm won an appellate decision upholding a preliminary injunction to keep generic equivalents of hypertension therapy Accupril off the market.

The company's recent successes have served to reinforce its commitment to protecting its intellectual property in the courts.

Speaking at the recent Morgan Stanley Pharmaceutical CEOs Unplugged conference in New York, Pfizer CEO Hank McKinnell said that settling the Lipitor dispute would be "kind of like negotiating with a car hijacker to give them your four wheels rather than the whole car. You can't do that. We had to stick to our guns."

"We continue to believe that policymakers should examine a system in which generic companies can take as many 'shots on goal' as they wish," Pfizer General Counsel Jeffrey Kindler said in a Jan. 19 earnings release. "Our only course is to aggressively defend our patents and stand for the principles we believe in, on behalf of the patients we serve and the future of medical innovation."

Pfizer's Success May Lead To More Settlements

Pfizer's take-no-prisoners approach to protecting its patents comes at a time when many brand companies are seeking settlements to avoid costly and lengthy litigation trials. The number of such settlements has been on the rise (¹ (Also see "Patent Suit Settlements On The Rise After Failure Of FTC Challenges – Barr" - Pink Sheet, 9 Jan, 2006.), p. 14).

Pfizer's recent triumphs, however, may convince more generic companies to consider the settlement route.

"The Lipitor case certainly could contribute to the momentum in favor of settling patent litigation among generic and innovator sponsors," former assistant FDA chief counsel David Fox (Hogan & Hartson) said in a recent interview with "The Pink Sheet."

"The fact that the patents were upheld, on a challenge by a strong generic sponsor, communicates the value of trying to settle and monetize a proposed generic product as early as possible. It suggests that if you can get value out of your challenge by settling, it pays to try," he stated.

Fox disputed the Federal Trade Commission's criticism that "reverse" payments made by brand firms to delay generic entry is anticompetitive. "The affirmation of the patent estate on a major, high-profile product adds considerable weight to the wisdom and defensibility of these types of settlement agreements," he asserted.

One recent example of the trend toward settlements is the patent litigation over Cephalon's sleep disorder treatment Provigil (modafinil). Three of the four generic companies involved in the suit have settled, Barr being the sole holdout. However, Barr CEO Bruce Downey has said that the firm is willing to settle.

"If you'd ask me if Cephalon could pull out four settlements all at once for Provigil last year, I would have said it's impossible, and they're three-quarters of the way there," Jennison Associates analyst David Chan said during the JP Morgan Healthcare Conference in San Francisco Jan. 12.

Besylate Salt Is An "Exceptional Discovery"

Under the most recent Pfizer victory, Apotex is barred from launching a generic version of calcium channel blocker Norvasc (amlodipine) until September 2007.

Chicago federal court Judge James Rosenbaum ruled that Pfizer's patent (no. RE4,879,303) covering amlodipine besylate is enforceable and thus infringed by Apotex.

Norvasc also is covered by patent no. RE4,572,909, which Apotex argued anticipated the '303 patent. Rosenbaum ruled that "there is nothing in the '909 patent, let alone clear and convincing evidence, to show that it anticipates the '303 patent."

In response to Apotex' claim that Pfizer engaged in inequitable conduct before the U.S. Patent & Trademark Office, the court determined that "Apotex has failed to show anything approaching clear and convincing evidence touching the second element, intent to defraud."

In his Jan. 18 oral opinion, Rosenbaum praised Pfizer's discovery of besylate salt. "The besylate salt works, and it has been incredibly successful. No matter how valuable the discovery of amlodipine, it is useless, useless to the point of nearly being rejected for pharmacological use, until the discovery, and the Court finds it to be an exceptional discovery."

"The '303 patent is valid, enforceable, and would be infringed unless the defendants are restrained from producing their proposed product prior to the expiration of the '303 patent term," the ruling says.

Apotex has already filed an appeal of the finding that the generic firm "willfully" infringed the '303 patent.

Imitation Is The Highest Form of Flattery

The long-awaited decision in the Lipitor dispute was similarly one-sided. Wilmington, Del. federal Judge Joseph Farnan ruled that the two main patents (nos. RE4,681,893 and RE5,273,995) covering atorvastatin are valid and infringed by Ranbaxy's ANDAs.

"What was particularly pleasing about this - and winning was certainly good - but it was how we won," McKinnell said during the Morgan Stanley conference. "The judge's ruling supported the Pfizer position on every one of the 11 legal positions in the case."

The court ruled that the '893 patent covers all trans-form isomers of atorvastatin, including enantiomeric atorvastatin calcium, and that Ranbaxy's ANDA infringed this patent.

Judge Farnan also found that the '995 patent claims the salt of atorvastatin calcium. "Because Ranbaxy's ANDA and associated Drug Master File indicate that its product will contain calcium, the court concludes that Ranbaxy literally infringes claim 6 of the '995 patent," he wrote.

Ranbaxy argued that the success of Lipitor was due to Pfizer's marketing strategies, not the efficacy of the product. The court disagreed, however, stating that Pfizer provided several studies and clinical trials that demonstrated the benefits of atorvastatin calcium and its "superiority" over other compounds.

Farnan found these data to be "sufficient to demonstrate Lipitor's success was the result of its medical efficacy compared with other products."

Similar to the Norvasc decision, the judge praised the benefits of Lipitor, writing that "the Court also finds that Lipitor satisfied a long-felt need in the medical community to provide patients with more effective statins to help them achieve their LDL goals."

"The fact that Ranbaxy has chosen to copy Lipitor in its ANDA further demonstrates the success and efficacy of Lipitor compared with other available products," Farnan wrote.

If the ruling is affirmed on appeal, Ranbaxy will not be permitted to launch atorvastatin generics before June 2011, when the '995 patent expires following a six-month pediatric exclusivity extension. Pfizer has said that Ranbaxy is the first ANDA filer on both patents.

"We've felt that we've been on the defensive here for 12-18 months, but when what you accomplish is protecting what is already yours, it's nice to have the uncertainty gone, but it doesn't create anything in terms of financial or operational opportunities from where we started," McKinnell said. "It's nice to be back on the offensive," he added.

Pfizer Well-Positioned To Prevail In Accupril Suit

In the third recent decision, a federal appeals court decision prohibited Teva and Ranbaxy from returning generic quinapril to the market until mid-2007.

The Nov. 22 decision affirmed a Newark, N.J. district court preliminary injunction, implying that Pfizer would likely prevail in its efforts to prove Ranbaxy infringes its patent (no. RE4,743,450). The '450 patent expires in August 2007 following a six-month pediatric extension.

The appellate ruling concluded that the lower court "did not abuse its discretion when it determined that Ranbaxy likely infringes the '450 patent either literally or under the doctrine of equivalents."

Teva and Ranbaxy launched the ACE inhibitor "at risk" in December 2004 under an exclusive supply and distribution agreement. Pfizer said it is seeking damages for lost sales of Accupril.

[Editor's note: Detailed coverage of the Accupril suit appeared in ² "The Pink Sheet" DAILY . To sign up for a free trial, visit www.ThePinkSheetDAILY.com.]