After an unsuccessful attempt to obtain a preliminary injunction against Sandoz Inc.’s (“Sandoz”) Zarxio®[1] in the District Court for the Northern District of California,[2] Amgen Inc. (“Amgen”) has prevailed before the Federal Circuit in excluding the biosimilar from the market, at least temporarily. On May 5, 2015, the Federal Circuit granted Amgen’s motion for an injunction “preventing Sandoz [ ] from marketing, selling, offering for sale, or importing into the United States its FDA-approved ZARXIO® biosimilar product until this Court resolves the appeal.” Amgen Inc. et al. v. Sandoz Inc. et al., Appeal No. 2015-1499, Dkt. 105 (Fed. Cir. March 27, 2015).

Shortly after Amgen’s preliminary injunction was denied and Sandoz received a favorable ruling on all of Amgen’s claims, Amgen appealed to the Federal Circuit. After filing its opening brief, Amgen sought to enjoin Sandoz from marketing and selling Zarxio® until resolution of the appeal. Dkt. 55 at 1. Amgen acknowledged that Sandoz had previously agreed to stay off the market until May 11, 2015, but argued that permitting the commercial marketing and sale of Zarxio®, which would directly compete with Amgen’s Neupogen®, would “fundamentally and permanently alter the market, causing irreparable harm to Amgen.” Id.

Amgen raised the same arguments made before the district court and also argued that the district court’s interpretation of the BPCIA would negatively impact reference product sponsors. In particular, Amgen argued that if an applicant was allowed to refuse to provide its BLA and manufacturing information, it would not result in the expedient resolution of patents disputes, as argued by the district court, but would instead enable an applicant to “game the system” by preventing a lawsuit from being filed pursuant to the BPCIA. Id. at 11. Similarly, Amgen argued that allowing an applicant to provide commercial marketing notice at the time the FDA accepts its BLA for review “frustrates the purpose of the notice” by taking away the reference product sponsor’s time to seek a preliminary injunction on any patents that would not be included in any lawsuit filed under the BPCIA. Id. at 13. This is based on the fact that the parties have not yet identified any relevant patents when the applicant’s BLA is accepted by the FDA, making the commercial marketing notice meaningless. Id. Amgen further argued that a declaratory judgment action should not be the sole remedy for any of the aforementioned BPCIA violations because it would allow the applicant to avoid litigation on manufacturing patents by intentionally failing to disclose any manufacturing information. Id. at 14. Additionally, a declaratory judgment is unable to remedy the harm of a lack of timely commercial marketing notice. Id. Finally, Amgen argued that the BPCIA does not state that declaratory judgment actions are the exclusive remedy. Id. at 15.

Contrary to the district court’s assertion that its irreparable harm was speculative and based on the unproven premise of infringement, Amgen argued that the harm it will suffer is unrelated to patent infringement and arises from Sandoz’s product entering the market. Id. at 16. Amgen alleged that Sandoz materially prejudiced Amgen by depriving it of up to 230 days of time as well as of information needed to determine infringement and commence litigation under the BPCIA prior to FDA licensure of Zarxio®. Id. Amgen then argued that Sandoz’s market entry would cause price erosion, irreparably undermine the value of Amgen’s patents because of “patent uncertainty,” and cause irreparable harm to Amgen’s reputation, consumer relationships, and goodwill if it prevails on appeal and tries to restore pricing. Id. at 17-19. Amgen further argued that the balance of hardships favors a short injunction because Sandoz is unlikely to suffer a significant impact due to the postponement of Zarxio®’s launch, whereas Amgen will be irreparably harmed. Id. at 19-20. Additionally, Amgen argued that the public interest also favors an injunction because there is strong public interest in drug development and lower pricing does not override that concern. Id. at 20. Further, condoning Sandoz’s behavior will simply encourage other potential biosimilar applicants to behave similarly, violating the BPCIA and its intent to preserve incentive to innovators to continue to engage in biologics discovery. Id.

In response to Amgen’s motion, Sandoz reiterated the arguments it made before the district court and contended that the district court’s rulings were correct. See Dkt. 83. Sandoz also responded to several of the arguments Amgen raised in its opening brief. According to Sandoz, the withholding of a BLA does not solely benefit the applicant, but also allows the reference product sponsor to file an immediate, pre-launch lawsuit that cannot be forestalled by the applicant. Id. at 9. This provides a pathway for the reference product sponsor to obtain the applicant’s BLA and also gives the reference product sponsor sole control over which patents are asserted in the litigation. Id. With respect to commercial notice, Sandoz argued that insisting that the applicant not provide notice until after licensure effectively creates an “automatic, bondless six-month injunction,” even if the reference product sponsor has no valid patents. Id. at 13 (internal quotes omitted). Regarding the available remedies for Sandoz’s alleged violations of the BPCIA, Sandoz noted that the BPCIA provides that if the applicant fails to provide its BLA, the submission of the BLA constitutes an artificial act of infringement. Id. at 13. According to Sandoz, the statute then specifies the available patent-specific remedies, all of which require proof that the biosimilar will infringe a valid patent claim. Id. at 13-14.

Additionally, Sandoz argued that Amgen cannot show irreparable harm because it is not harmed from infringement—the only way under the BPCIA a reference product sponsor can prevent a biosimilar from entering the market. Id. at 16. Sandoz observed that Amgen has not pressed for adjudication of any of its patent rights in this litigation. Id. Further, Sandoz argued that its withholding of its BLA enhanced Amgen’s ability to protect its patent rights by precluding Sandoz from having any control over how many and which patents would be litigated. Id. at 16-17. Sandoz also observed that Amgen was never prevented from seeking a preliminary injunction during the 180 days after Sandoz provided its commercial marketing notice. Id. at 17. With respect to price erosion and harm to goodwill, Sandoz argued that Amgen’s theories were unavailing. Id. at 17-18. Sandoz characterized Amgen’s “patent uncertainty” as a legally unsupported novel theory of harm. Id. at 18. Sandoz further observed that Amgen has acted inconsistently with suffering from its claimed irreparable harms by rejecting Sandoz’s offers to provide its BLA and delaying filing suit and seeking a preliminary injunction. Id. at 18-19. Finally, Sandoz argued that the balance of hardships weighs in its favor because Amgen has already enjoyed a long period of exclusivity and delay would impair Sandoz’s current head start over two other biosimilar filgrastim applicants that are expected to receive approval in 2015 or early 2016. Id. at 19.

After the parties’ extensive briefing on the injunction, the Federal Circuit simply issued an order granting the injunction, effective immediately and requesting briefing on the amount of a bond without any further comment. Dkt. 105. The Federal Circuit appears to have found that Amgen has demonstrated a sufficient likelihood of success on its appeal to issue an injunction. It will be interesting to see how the Federal Circuit rules on the interpretation of the BPCIA provisions at issue in this appeal and whether it finds in Amgen’s favor as the issuance of this injunction might suggest.

K&L Gates will continue to monitor Amgen’s appeal and provide any updates.

Notes:
[1] Zarxio® is a biosimilar of Amgen’s Neupogen® (filgrastim).

[2] A discussion of the Northern District of California’s denial of Amgen’s preliminary injunction request can be found in our previous alert, Dancing Not Required: District Court Denies Amgen’s Bid for Preliminary Injunction, Finds BPCIA “Patent Dance” Optional.