Allergan Loses Patent Fight in Federal Court
October 16 2017 - 4:41PM
Dow Jones News
By Imani Moise
A U.S. District Court ruled Monday that patents for one of
Allergan PLC's best-selling drugs are invalid, potentially opening
the door for generic competition.
Shares of the pharmaceutical company fell 4.9% to $196.70 during
afternoon trading following the decision to invalidate four patents
for Allergan's dry-eye drug Restasis. Allergan has said it plans to
appeal the decision.
Allergan took out the Restasis patents in 2013 as the drug began
facing the threat of competition from generic versions. The company
said the patents were supposed to last until 2024, while generic
rivals argued the patents shouldn't have been granted in the first
place and should be ruled invalid.
Mylan NV and Teva Pharmaceuticals Industries Ltd. are among the
companies working on generic versions of Restasis, but they have
yet to win federal approval. Allergan tried to stop them in part by
asking the federal court in Texas to find the generic companies
were infringing on the Restasis patents.
Allergan last month sold the patents for Restasis, its
second-best selling drug after Botox, to a Native American tribe,
in an attempt to shield them from a separate challenge before the
U.S. Patent and Trademark Office. The tribe's sovereign status
would exempt it from cases before the patent office. Allergan said
its aim was to avoid the "double jeopardy" of defending Restasis
patents in both federal court and the U.S. patent office.
Mylan criticized that move, calling it a "sham," and asked the
federal judge court to prevent the tribe from joining the patent
litigation before the district court.
Monday's ruling listed the Saint Regis Mohawk Tribe tribe as a
co-plaintiff but said adding the tribe as a party didn't mean the
court was acknowledging that the patent-rights transfer was
valid.
"The Court has serious concerns about the legitimacy of the
tactic that Allergan and the Tribe have employed," Judge William
Bryson wrote in his decision.
Analysts at Wells Fargo said the impact of generic competition
was largely already factored into the Allergan's current valuation,
noting that the company's market value has lost nearly $9 billion
since early September. Since generic versions haven't been approved
yet, the bank estimates the earliest that Restasis may face
competition in the market is in 2019.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
October 16, 2017 16:26 ET (20:26 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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