Lilly To Pay $4 Mil. To Delay Public Trial Of Prozac Patent Case

Lilly will pay $4 mil. to delay a public trial of its Prozac (fluoxetine) patent defense under a settlement announced Jan. 25.

Under the agreement, the payment will be split between Barr, Geneva and Apotex, the three challengers to Lilly's antidepressant patents. The case will proceed directly to appeals court on the claims of best mode and double patenting, which were dismissed by Indianapolis federal court Judge Sarah Barker in a pre-trial hearing Jan. 12 ("The Pink Sheet" Jan, 18, p. 9).

The agreement reflects Lilly's interest in keeping the case under seal for as long as possible. All documents produced so far have been kept confidential.

The settlement also reflects Barr's belief that its strongest claims were dismissed in the pretrial hearing, the generics company said.

The patent challenge trial was scheduled to begin Jan. 25 in Indianapolis federal court on the issues of anticipation and inequitable conduct, claims that are now dropped.

Barr maintains that the agreement will speed up litigation. "Moving the case directly to the appeals process provides the assurance that the challenge on the first Prozac patent will occur before its expiration in 2001," Barr asserted.

"Today's action should permit a court of appeals decision within the first calendar quarter of 2000," the generics company continued. "Without this agreement, the case might have taken two or more years before a decision on an appeal could be rendered."

Lilly maintained that since "the trial was scheduled to last no more than two weeks, the timing of any appeal is not affected in any meaningful way." The company predicts that a decision will take 12-18 months.

Barr is challenging two fluoxetine patents: number 4,314,081, set to expire Feb. 2, 2001; and number 4,626,54, which expires Dec. 2, 2003. Lilly could receive a six-month patent extension for pediatric studies of Prozac.

The '081 patent claims arloxyphenylpropylamines that are "useful as psychotropic agents, particularly as antidepressants," while the later '549 patent covers a "method of blocking the uptake of monoamines by brain neurons in animals," and specifically a method of blocking serotonin.

The double patenting claim presumably focuses on the distinction between the patent for use in depression and for use in blocking serotonin.

The best mode issue involves allegations of Lilly's "nondisclosure of methods of making the commercially available starting material p-trifluoromethylphenol," according to the court docket, as well as "nondisclosure of a recrystallization solvent for fluoxetine."

The $4 mil. payment Lilly is making to settle the anticipation and inequitable conduct claims represents approximately 16 hours worth of Prozac sales in the U.S., based on 1998 sales for the drug of $2.27 bil.

Barr has developed a robust line of business based on patent settlements. In 1993, the generics company settled a tamoxifen (Zeneca's Nolvadex) patent suit with Zeneca for $21 mil. up-front and a non-exclusive distribution agreement.

Barr currently sells an "authorized" version of tamoxifen, manufactured by Zeneca.

Barr also settled patent litigation over Bayer's Cipro (ciprofloxacin) in January 1997 for $24.6 mil. and a supply agreement estimated to be worth approximately $25 mil. annually.

The Justice Department has shown some interest in Barr's settlement with Zeneca, Barr said during a recent teleconference. In June, Barr agreed to allow DoJ access to the unabridged copy of its agreement with Zeneca and other papers produced in discovery, the company said, though it has not been contacted by DoJ since then ("The Pink Sheet" Jan. 25, p. 7).

Because the Prozac agreement does not terminate the litigation, it presumably does not raise the kinds of issues that are of interest to DoJ.

Barr filed an ANDA for fluoxetine in December 1995, and Lilly filed suit in April 1996.