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Allergan’s patent gamble fails

Published on 27/02/18 at 11:33am

Allergan’s patent deal with the Saint Regis Mohawk Tribe, in an attempt to protect itself from an inter partes review on Restasis, drew a huge number of headlines, mostly condemnatory; now, the judgement as to whether this manoeuvre is valid has come back, and it isn’t positive for Allergan.

The US’ Patent Trial and Appeal Board (PTAB) rejected the Native American’s move to block Mylan’s patent challenge thereby nulling Allergan’s attempts to avoid a patent challenge from this angle.

Allergan had signed the original deal with the tribe under the legal reasoning that its sovereign immunity would prevent it from being challenged in court. In order to secure the deal, it had paid $13.75 million upfront and had promised annual royalties of up to $15 million from sales of Restasis, but only if the patents remained in place.

Brent Saunders, CEO of Allergan, has previously claimed that the need to fight patent challenges from both conventional and IPR challenges had placed them in an untenable position – necessitating drastic action, such as using tribe immunity to protect drug patents.

This argument didn’t really fly for many, who simply saw it as a last-ditch attempt to protect blockbuster sales for Restasis. The treatment is its second biggest-seller, behind Botox, and the company is loath to allow loss of patent protection eating into annual sales of $1.4 billion.

The loss of this court case now makes this look more than likely. The judgement concluded, “Because Allergan remains the effective patent owner, we determine that these proceedings can continue with Allergan’s participation only, regardless of whether tribal immunity applies to the Tribe”.

The tribe looks unlikely to let itself be squeezed out of the fight so easily, and it looks likely to launch an appeal – understandable for a small community of approximately 3,000 residents who could depend on the royalties of the treatment to support their community.

For other players in the industry, it will more than likely serve a lesson not to expect sovereign immunity to be the latest tactic in delaying patent challenges. There had been some interest in the case, with potential success more than likely leading to copycat moves by others under patent pressure. With this ruling, however, that possibility looks firmly quashed.

One player in the market who was particularly pleased with the result was Mylan, who had brought the case against Allergan. Mylan CEO Heather Bresch commented, “Mylan has always been vocal in its efforts to challenge and break down barriers to access. The PTAB's ruling reinforces our belief that Allergan's manoeuvres to engage the St. Regis Mohawk Tribe for patent protection were a sham. We will continue to be steadfast in our efforts on both the legal and regulatory fronts to bring a generic version of Restasis to patients as quickly as possible.”

Ben Hargreaves

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