Several big conventional and biotechnology drugs are set to lose patent protection in the next few years,creating a potential bonanza for generic drug makers.
Irvine-based Sicor Inc., for one, is readying by building a new factory in central Mexico where it plans to make generic versions of biotechs and other drugs. But Sicor and others may need more than just modern plants to compete in the generic drug derby. They’ll also need their lawyers. After spending millions developing drugs and gaining patents, big drug makers and ambitious biotech companies aren’t giving up without a fight. In some cases, drug makers are applying for new patents on their original products and taking generic drug makers to court over them.
Gensia Sicor Pharmaceuticals Inc., a Sicor unit, recently won an appeal of a patent infringement case brought by Bristol-Myers Squibb Co. Late last month, a U.S. appeals court upheld a lower court finding that a Bristol-Myers patent covering cisplatin, a chemotherapy drug made by Sicor, was invalid.
More fights may loom ahead for Sicor. But several analysts believe patent expirations hold big opportunities for generic drug makers with a fighting spirit.
“What makes it worthwhile is that the reward is that you often don’t have competition,” said Robert Uhl, director of research for Leerink Swann & Co., a Boston investment bank.
Uhl cited Sicor’s propofol, a generic version of AstraZeneca Pharmaceuticals LP’s Diprivan anesthesia drug. Two years ago, Zeneca Corp., now part of AstraZeneca, sued Sicor over propofol in a patent lawsuit that later was dropped. The fight was worth it, he said.
“Sicor has a 50% share of that market with their partner, Baxter (International Inc.). They get only half of those sales, but that’s what transferred them to profitability,” Uhl said.
In the past few years, brand-name drug makers have fought back against generics by getting new patents on existing drugs,such as those for one-a-day formulas and other variations.
“Branded companies have become much more aggressive,” Uhl said. “Generic companies will face a lot more patent battles.”
Lawsuits are a “generic industry phenomenon,” said Laurie Little, a Sicor spokeswoman.
“Unfortunately, in the generic world, if a product has significant dollar sales, it’s in the innovator’s best interest to challenge the patent,” she said.
Cases such as the one involving Bristol-Myers and Sicor go to court because “either there’s a good case or there’s so much money at stake the parties agree to go to court, even if there’s only a small chance of winning,” said Ned Israelson, managing partner of Knobbe, Martens, Olson & Bear LLP’s San Diego office.
Brand-name drug companies can “lock you up for 30 months” in court and continue to sell their formulation, Sicor’s Little said. “If it makes lots of money, they’ll want to stall it. It’s the way of the world.”
In terms of how investors see patent battles, they “understand this is part and parcel of what we need to do. Wall Street assumes that it will be a success, a significant product,” Little said.
Tension between generic and brand-name drug companies exists, particularly if the drug in question is valuable, according to Jeffrey Wall, an attorney in O’Melveny & Myers LLP’s Newport Beach office. “Drug companies are going to figure out ways to extend their patents.”
Wall called the Bristol-Meyers case one of a “submarine” patent because it involved a secondary patent issued the same year that Bristol-Myers’ original two cisplatin patents expired. Such cases are diminishing, he said, as a result of legislation passed in the 1990s.
While the threat of litigation is high, generic drug companies are “pretty savvy” in scouting out drugs that are about to lose patent protection, according to Peter Hahn, who chairs the technology and intellectual property group at the Luce, Forward, Hamilton & Scripps LLP law firm in San Diego.
In a court challenge, a generic drug maker “may start to attack the validity of a patent. They’re entitled to attack it. If (the generic company) has good evidence, they’re entitled to go into federal court,” Hahn said.
That’s what Sicor did in the Bristol-Myers case. The legal fight started in 1997, when the New York-based drug maker sued Sicor and other drug companies on cisplatin patent infringement allegations.
The Bristol-Myers case centered on a cisplatin patent awarded to Michigan State University researchers in 1996, just before Bristol-Myers’ cisplatin patents expired. The researchers assigned their patent to Research Corporation Technologies Inc. of Tucson, Ariz., which in turn licensed it to Bristol-Myers.
In 1999, the U.S. District Court for the District of New Jersey ruled that the new Bristol-Myers patent was invalid. At that time, Gensia Sicor started making its generic form of cisplatin, which is used to treat testicular, ovarian and other cancers. Tour de France winner Lance Armstrong used the drug to battle testicular cancer.
Sicor’s lawyers were able to convince the trial court that the 1996 cisplatin patent had no significant distinction from the prior expired patents, according to John Benassi, a partner with Brobeck, Harrison & Pfleger LLP’s San Diego office.
“All of a sudden, this submarine patent popped up,it was used to prevent Gensia and other entrants from making generic cisplatin,” Benassi said.
Bristol-Myers does not intend to continue with the Sicor cisplatin patent matter, according to a spokeswoman.
For Sicor, the court win is important in the context of its larger battle to win access to drugs. But a major source of revenue wasn’t at stake, according to one analyst.
“Basically, we took it for granted. The outcome wasn’t in serious question,” said Tim Coan of ING Barings in New York. “(Cisplatin’s) a nice additional product, but it does not pay the bills in and of itself.”
Sicor isn’t completely finished with Bristol-Myers. The companies are in a legal dispute concerning patents for mesna, a kidney-protecting agent used in chemotherapy that’s marketed as Mesnex. That lawsuit is pending in a New York-area federal district court. n
