Lilly Ordered To Pay Royalties On Evista, Xigris Until 2019
This article was originally published in The Pink Sheet Daily
Executive Summary
A federal jury ruled Lilly’s two products infringe a patent exclusively licensed by Ariad Pharmaceuticals.
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Lilly will pay royalties on its osteoporosis product Evista and sepsis treatment Xigris to Ariad Pharmaceuticals until 2019, a Massachusetts federal jury ruled May 4. The jury found that Ariad's patent no. 6,410,516 is valid and infringed by Evista (raloxifene) and Xigris (drotrecogin). The jury awarded Ariad roughly $65 mil. in back royalties and a 2.3% royalty on future sales of the two products until the '516 patent expires in 2019. Evista reported U.S. sales of $652.6 mil. in 2005, with Xigris logging $118.9 mil. more. "Ariad is demanding royalties for Lilly's promotion of the use of Evista and Xigris as medicines even though, as we proved in court, Lilly discovered these drugs and disclosed their medicinal properties years before the patentee's scientists made their discovery," Lilly General Counsel Robert A. Armitage said May 4. Ariad exclusively licenses the '516 patent from Harvard University, the Massachusetts Institute of Technology and the Whitehead Institute. The patent, issued in 2002, covers the discovery that a "messenger" protein, known as NF-KB, is found in "many, if not all, cell types and that it acts as an intracellular messenger capable of playing a broad role in gene regulation as a mediator of inducible signal transduction." Ariad alleged in its complaint that the "molecular basis for the action of Evista in treating osteoporosis has been demonstrated to occur through the modulation of NF-KB activity" and that a "molecular basis for the action of Xigris in treating septic shock has been demonstrated to occur through the inhibition of NF-KB activity." Lilly said it plans to appeal the grand jury's decision and, if unsuccessful, appeal to the Federal Court of Appeals. Lilly also said a separate bench trial in the Massachusetts court will hear the firm's argument that the '516 patent is unenforceable; the court will also consider the patent's coverage of natural processes, which Lilly alleges is improper. In Laboratory Corporation of America v. Metabolite Laboratories, a case recently heard by the U.S. Supreme Court, LabCorp contended that a Metabolite patent is invalid because it covers a natural phenomenon. The Court has yet to yield a decision. The federal jury's verdict may suggest a favorable outcome for Ariad in another case. In Delaware federal court, Amgen is seeking a declaratory judgment that the claims of Ariad's '516 patent are invalid and, therefore, Amgen's TNF inhibitor Enbrel and rheumatoid arthritis therapy Kineret do not infringe it. -Kathryn Phelps |