Court Blocks Novartis AG's Recently Approved "Biosimilar" Form of Amgen's Neupogen

Published: May 11, 2015

Court Blocks Novartis AG's Recently Approved
May 8, 2015
By Riley McDermid, Breaking News Sr. Editor

Recent news that a court had blocked Novartis AG ’ request to begin selling a biosimilar copy of Amgen ’s Neupogen could be setting an important precedent for the inevitable tussles on the horizon for companies looking to protect the billion dollar patents of some of the world’s most blockbuster drugs, an analyst said Friday.

In March, Novartis won approval from the U.S. Food and Drug Administration (FDA) for the nation’s first biosimilar drug, after the FDA said the company could now sell its white blood cell drug Zarxio, a knockoff of Amgen (AMGN)’s blockbuster treatment Neupogen, or filgrastim.

But yesterday the U.S. Court of Appeals for the Federal Circuit overturned a March 19 ruling by San Francisco federal court Judge Richard Seeborg, saying that sales of Novartis’ knockoff, Zarxio, should not proceed pending Amgen’s appeal of its case.

That could pave the way for a whole host of new legal challenges to biosimilars, said Mark Schoenebaum, a well-regarded biotech analyst and medical doctor for ISI Evercore.

“This could help set an important precedent for granting injunctions ahead of at least some litigation decisions in other biosimilar cases,” he wrote in a note to investors. “This certainly does not in any way, however, guarantee that injunctions will be granted in all cases since the facts of each case will differ (and thus the ability of branded companies' arguments to meet the injunction criteria will differ from case to case).”

Schoenebaum also pointed out that while welcome, the decision is a costly one for Amgen, who the judged said must now post a bond for each day that the injunction is in place in order to cover damages to Sandoz, Inc. should Amgen lose.

“Although the judge provided no rationale (yet), we know that Amgen had argued that a launch would cause "irreparable harm" by causing price erosion. Presumably, the judge accepted this argument,” said Schoenebaum. “There are, of course, other criteria that are generally needed in order to meet the threshold for an injunction, such as a high likelihood of success on the merits and that granting the injunction would serve the public interest (Amgen makes all these arguments in its brief).”

Biosimilars, which are made inside a living cell, are always uniquely different in composition, which differentiates them from generic drugs, which are exact replicas of other drugs. They have been widely available in Europe since 2006, but the FDA was only granted the right to review and approve them when Obamacare was passed in 2010.

Neupogen raked in $1.2 billion for Amgen last year, a lucrative market that Novartis, and its Sandoz unit that makes Zarxio, are now eyeing eagerly. The FDA said in January that an internal panel seemed inclined to give Zarxio the green light to treat the same five conditions Neupogen does. Sandoz declined to issue a price target for Zarxio. That means the stakes for other companies to protect their own patented blockbusters are enormously high, said analysts.

“The highest profile upcoming case, perhaps, in the biosimilar world will probably be AbbVie vs. Amgen around biosimilar Humira. Abbvie has strongly implied that it believes it can delay Amgen's launch via litigation,” said Schoenebaum. “The biggest risk to such a delay, however, comes if the courts do not enjoin Amgen from launching until the litigation is complete. If such an injunction is not granted, Amgen could, if they chose to, launch "at risk" prior to a final court decision.”

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