Court May Ask Roche To Pay Amgen 22.5 Percent Royalty To Market Mircera

A district court judge issued a preliminary injunction blocking Roche's launch of Mircera (epoetin beta) in the United States and suggested the terms under which Roche might begin selling its anti-anemia drug.

In a Feb. 29 order, Judge William Young, of the U.S. District Court for the District of Massachusetts, said he may modify the preliminary injunction in 30 days, provided the appellate court has not taken up the case. If he modifies the injunction, Young said the future order would permanently enjoin Roche unless the company meets five conditions.

First, Roche would have to pay Amgen a 22.5 percent royalty. Secondly, the company would have to provide Mircera in the Medicare market with an average selling price at or below the ASP of Amgen's Epogen (epoetin alfa) for the life of Amgen's patents.

In addition, Roche would have to "provide evidence of clinical usage and the real world dosage of Mircera so that the court accurately can determine a dose conversion factor for Mircera's FDA-approved indication."

Roche would also have to fund an independent agency to monitor Roche sales and account for the royalty payments. And, if Roche decided to enter the market based on these conditions, "regardless of the outcome of any future litigation," Roche would have to continue to provide Mircera to any patient who requests it, at or below the same price for which it was authorized, as long as the patient requires.

Judge Young asked Amgen and Roche to submit briefs on the issue within two weeks.

The permanent injunction decision is based on four factors. Young said three of these tests had been met in the Mircera dispute: the jury verdict confirmed Amgen's patents are valid and infringed; "anything other than permanent injunction for the remaining life of the patents would inadequately compensate Amgen"; and the balance of hardships between Amgen and Roche weighs in favor of an injunction for Amgen. The court continues to struggle with the question of whether "the public interest would not be disserved by a permanent injunction."

In October, a jury found that Mircera infringed Amgen's patents covering Epogen and Aranesp (darbepoetin alfa). FDA approved Mircera, a pegylated erythropoietin formulation, the following month for treatment of anemia associated with chronic renal failure. The court subsequently invited Roche to propose economic terms under which it might be allowed to begin selling the drug.

Roche had proposed selling Mircera at an initial wholesale acquisition cost equal to the present ASP of Amgen's Aranesp less five percent. It also offered to pay Amgen a royalty of 20 percent of the net sales of Mircera in the U.S. until Amgen's infringed patents expire. Roche said it would move forward with an at-risk launch if the court does not rule on its proposal (¹ (Also see "Roche Plans At-Risk Launch Of Mircera, But Offers Amgen A 20% Royalty" - Pink Sheet, 11 Feb, 2008.), p. 13).

Amgen adamantly rejected the proposal. In a Feb. 19 filing, it said the royalty is "grossly inadequate to compensate Amgen for Roche's infringement." And it said the proposed price would still cost the government up to 45 percent more than Amgen's Epogen (² (Also see "Amgen Dismisses Roche’s Licensing Proposal For Mircera, Wants Injunction" - Pink Sheet, 25 Feb, 2008.) p. 7).

Roche said it would evaluate the court's request for amended economic terms as well as its legal options. The company also requested an emergency order to draw an adverse inference that Amgen will not be irreparably harmed by the denial of a permanent injunction. In a Feb. 27 filing, Roche cites a "secret side agreement" between Amgen and Johnson & Johnson's Ortho unit to share in any damages or royalty payments on sales of Mircera. Roche said Ortho, a non-exclusive licensee, had revealed the agreement within the past few days.

- Brenda Sandburg ([email protected])