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Allergan patents on dry eye drug Restasis deemed invalid by US judge

A Texas district court judge invalidated four patents held by Allergan plc on its dry eye drug Restasis.

The ruling came in a dispute in the U.S. District Court for the Eastern District of Texas between Allergan and generic drugmakers led by Mylan NV and Teva Pharmaceutical Industries Ltd., Reuters reported Oct. 16.

Reuters reported that the ruling could allow the companies to market a generic copy of the drug.

Currently, there are no approved generic versions of the drug in the market. Restasis had global sales of about $1.49 billion in 2016.

Allergan said it will appeal the ruling. Chief Legal Officer Robert Bailey said the company is disappointed by the court's ruling and is carefully reviewing the decision and considering all options.

In September, Allergan transferred Restasis patents to the St. Regis Mohawk Tribe in an attempt to shield them from legal challenges.

The court has "serious concerns about the legitimacy of the tactic" used by Allergan and the tribe, Evercore ISI analyst Umer Raffat said in an Oct. 16 research note. He noted that Allergan claims to have sold the patents to the tribe, but "in reality it has paid the tribe to allow Allergan to purchase — or perhaps more precisely, to rent — the Tribe's sovereign immunity."

"If that ploy succeeds, any patentee facing [inter partes review] proceedings would presumably be able to defeat," Raffat added.

Most recently, Mylan urged the judge to rule that the deal between Allergan and the tribe as a "sham" and to prevent the tribe from joining the patent case before the court, The Wall Street Journal reported Oct. 14. The company argued that "there has been no real change in ownership — just a maneuver to derail" a review by the U.S. Patent and Trademark Office.

Allergan filed a brief in response asking the court to add the tribe to the proceedings, stating that the ownership of the patents was transferred via a "legitimate arm's-length transaction," according to the Journal.

On Oct. 12, Allergan settled with Innopharma Inc. over certain patents of Restasis. The settlement allows InnoPharma to start selling a generic version of the drug in the U.S. from Feb. 24, 2024.

Previously, a coalition of 10 groups in the healthcare industry urged congressional leaders to examine the deal.

In a letter to House Speaker Paul Ryan, R-Wis.; House Minority Leader Nancy Pelosi, D-Calif.; Senate Majority Leader Mitch McConnell, R-Ky.; and Senate Minority Leader Chuck Schumer, D-N.Y., the groups criticized the transfer, calling it a "brazen attempt to circumvent U.S. law and engineer a mechanism to maintain monopolistic high drug prices."

The deal has also received criticism from certain U.S. senators. Allergan CEO Brent Saunders has defended the patent transfer and criticized the inter partes review process, calling it "flawed and broken."