Epogen Biosimilar Jury Verdict May Ignite New 'Safe Harbor' Battle

Amgen awarded $70m in damages after jury finds certain batches of Hospira's Epogen biosimilar infringed a manufacturing process patent; case offers 'juicy legal issue' for Federal Circuit to address.

A jury verdict that Hospira Inc.'s pre-approval manufacture of several batches of its biosimilar to Amgen Inc.'s Epogen (epoetin alfa) infringed one of Amgen's manufacturing process patents could lead to a new fight over how much biosimilar production is permitted for an FDA submission.

In its Sept. 22 verdict, a jury of the US District Court for the District of Delaware concluded that Hospira (now a subsidiary of Pfizer Inc.) infringed Amgen patent No. 5,856,298 and that 14 of 21 batches of its biosimilar were not protected by the safe harbor defense. Under US patent law, the "safe harbor" provision shelters the manufacture of a product from an infringement suit if the manufacture is related to the submission of information to FDA.

The jury also found that the '298 patent was not invalid and not obvious and awarded Amgen damages of $70m. In addition, the jury found that Hospira did not infringe patent No. 5,756,349.

Hospira argued that it did not infringe the patents because the batches it produced were covered by the safe harbor provision. But in a Sept. 7 memorandum order, US District Judge Richard Andrews denied Hospira's motion for summary judgement on the safe harbor defense saying there were genuine disputes of material fact as to whether the manufacture of 21 lots of epoetin (EPO) for commercial inventory from 2013 to 2015 was "'solely for uses reasonably related to the development and submission of information' to the FDA."

The court noted that there is evidence that Hospira manufactured tens of millions of doses of EPO with a commercial value in the hundreds of millions.

'Juicy Legal Issue' For Federal Circuit

Chad Landmon, a partner at Axinn, Veltrop & Harkrider, said the verdict could potentially have a broader impact on biosimilar patent disputes and he expects it will be appealed to the US Court of Appeals for the Federal Circuit.

What constitutes safe harbor for a biosimilar applicant is "a juicy legal issue the Federal Circuit will dig into carefully," Landmon said. While the court has addressed the scope of the safe harbor in other cases, he said it may be different for biosimilars given their complexity and the potential need for companies to make more product than in the pharmaceutical space.

Joshua Whitehill, an associate at Goodwin Procter, said the significance of the safe harbor decision will depend on the specific facts of the case. Information in court filings was redacted so it is unclear why some batches were covered under the safe harbor and others were not.

Whitehill said it is an unusual case since the patents expired after the suit was filed and Pfizer has never sold the drug.

Pfizer announced in June that it had received a second complete response letter from FDA for its epoetin biosimilar, which has a proposed trade name of Retacrit. The company said the letter relates to manufacturing compliance concerns at a legacy Hospira manufacturing facility in Kansas that was the target of a February warning letter. Pfizer inherited the facility through its acquisition of Hospira in September 2015. (Also see "Pfizer’s EPO Biosimilar Stalls In US On Hospira Compliance Woes" - Pink Sheet, 22 Jun, 2017.)

Pfizer plans to appeal the verdict. "Hospira will continue to vigorously defend this case and will appeal this decision at the appropriate time," a spokesperson said. "The company remains committed to making this important treatment option available to patients and physicians as quickly as possible."

Amgen said it is very pleased with the verdict. "Enforcing our patents against infringement is critical to our mission of developing new therapeutics to treat serious illnesses for patients who need them," the company said in a statement.

Amgen Sought Higher Damages

It is unclear from the verdict form how the jury calculated a reasonable royalty of $70m. In its Sept. 7 order, the district court noted that Amgen's expert witness determined that a reasonable royalty would be a lump-sum payment from $153.9m (based on a "maximum willingness to pay") to $415.3m (based on a "minimum willingness to accept").

Judge Andrews agreed that the $415.3m figure is unreliable because it assumes Hospira would be able to take away Amgen's sales from DaVita Inc., a provider of dialysis services, which at the relevant time had an exclusive supply contract with Amgen requiring it to purchase 90% of its EPO from Amgen through at least 2019. The judge excluded evidence offered in support of the $415.3m figure but did not exclude evidence in support of a $170.4m figure.

In jury instructions, the court listed numerous factors for the jury to consider in determining a reasonable royalty, including the royalties Amgen had received for licensing of the patents at issue; the utility and advantages of the patented property over the old modes or devices, if any; the portion of realizable profits that should be credited to the invention; and the commercial relationship between Amgen and Hospira, such as whether they are competitors in the same territory in the same line of business.

Whitehill said it seems a bit uncommon for damages to be awarded for pre-approval manufacturing, where lost profits are not available.

He noted that the verdict also appears to be the first case under the Biologics Price Competition and Innovation Act (BPCIA) in which the reference product sponsor has won.

Amgen Sues Mylan Over Its Pegfilgrastim Biosimilar

The Federal Circuit is to hear oral arguments in two cases next week. Janssen Biotech Inc. is appealing a district court ruling that its Remicade (infliximab) manufacturing process patent No. 6,284,471 is invalid for obviousness-type double patenting. The case involves Celltrion Inc.'s Inflectra (infliximab-dyyb) biosimilar. The court will also hear oral arguments in Janssen's appeal of a reexamination decision by the US Patent and Trademark Office that the '471 patent claims are unpatentable.

In the second case, Amgen v. Apotex Inc., Amgen is appealing a September 2016 district court decision that Apotex's biosimilars to Neulasta (pegfilgrastim) and Neupogen (filgrastim) do not infringe its manufacturing process patent No. 8,952,138, which expires in 2031. (Also see "Biosimilar Litigation: Genentech Avastin Suit Tossed; Janssen Remicade Case Uncertain" - Pink Sheet, 3 Mar, 2017.)

Amgen also filed suit against Mylan Pharmaceuticals Inc. on Sept 22 in the US District Court for the Western District of Pennsylvania alleging Mylan's pegfilgrastim biosimilar infringes two patents, No. 8,273,707 and No. 9,643,997, which claim methods of purifying proteins used in the manufacture of a biological product.

The suit follows the exchange of patent information between the two parties as laid out under the BPCIA. Amgen claims Mylan provided Amgen's counsel access to its abbreviated biologics license application on March 2 but that it was in a format different from and less complete than the format provided to FDA and impeded Amgen's ability to review the application.