Actelion will pay $407M in damages for its buyout to protect Tracleer

Drugmakers have often been accused of trying to thwart competition with arrangements like pay-for-delay deals or aggressive patent litigation to protect their key drugs. But Swiss drugmaker Actelion ($ATLN) went even further than that, a court ruled, buying out a drug company and then canceling a development deal in an effort to protect its only significant product at the time, pulmonary arterial hypertension (PAH) drug Tracleer.

A state appeals court in San Francisco has upheld a $407 million jury award against Actelion and in favor of Asahi Kasei Pharma of Japan, according to Asahi had developed Fasudil for treating PAH, and it was a potential threat to Tracleer, Actelion's foundational product. Tracleer delivered 87% of Actelion's $1.84 billion in revenue last year but loses patent protection in 2015.

In 2006, Asahi struck a deal with Bay Area biotech CoTherix to develop oral and inhaled versions of Fasudil and take it to regulators in the U.S. and Europe for approval. Five months later, however, Actelion scooped up CoTherix for $400 million and canceled the arrangement with Japanese company. Asahi sued.

According to, Actelion claimed it killed the deal because it had determined Fasudil was not safe. A jury in 2011 found otherwise and awarded Asahi $546 million, which was later reduced to $377 million for the company to cough up and $30 million from Actelion executives.

It is not the only time that Actelion's protective nature has led to litigation. The drugmaker has been sued by generic drug companies for refusing to provide samples of Tracleer for them to work with. But Actelion is now moving beyond Tracleer. The FDA in October approved Opsumit, Actelion's new PAH treatment and a follow-up to Tracleer that is expected to be a blockbuster.

- read the SFGate story