Allergan Partners With Indian Tribe to Protect Drug Patents

By Jonathan D. Rockoff

Allergan PLC has taken a novel step to protect a top-selling drug from generic competition: the company has sold the drug's patents to an Indian tribe in upstate New York to block rivals from challenging the patents at the U.S. Patent and Trademark Office.

Lawyers for the St. Regis Mohawk Tribe, which operates a casino on its reservation near the Canadian border, said it will ask the patent office on Friday to drop patent challenges filed by Akorn Inc., Mylan NV and Teva Pharmaceutical Industries Ltd. due to the tribe's special legal status as a sovereign government, which the tribes says gives it immunity from patent office trial review.

In January, the office dropped a patent challenge filed against the University of Florida, citing the school's sovereign status as a state institution.

The agreement will entitle the tribe to a $13.75 million initial payment and $15 million in annual royalties, starting next year, until the Restasis patents expire or are no longer valid. Restasis had $1.4 billion in revenue last year.

If its moves succeed, Allergan will be able to avoid a pending hearing before a patent-office panel on the patents for its Restasis dry-eye drug, a key product for the company. A separate review of the Restasis patents, by a federal court in Texas, will continue.

"We are completely open to having these patents adjudicated in the federal courts. But we don't think, going through that, we should be subject to a second review" at the patent office, Allergan CEO Brent Saunders said in an interview.

The federal court held a trial on the claims last week, and Allergan expects a decision within the next few months, according to Bob Bailey, the company's chief legal officer.

Shares of Allergan, where were briefly halted, were up about 2% at $232.22 in midday trading.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

September 08, 2017 13:52 ET (17:52 GMT)

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