Allergan CEO Saunders claims 'tenacity' led company into tribal licensing deal

Allergan CEO Brent Saunders said it was "tenacity" rather than "desperation" that led the company to execute its tribal licensing agreement on Restasis.

After losing a high-stakes patent case for blockbuster eye med Restasis, Allergan CEO Brent Saunders is offering a rationale for the company's controversial patent transfer to the Saint Regis Mohawk Tribe. 

Speaking with CNBC's Jim Cramer, Saunders said it was "tenacity," not "desperation," the led the company to enter into the deal that quickly sparked so much criticism. He said IP protection is the backbone of the pharmaceutical industry, and that it's possible to favor innovation while also ensuring patient access and fair pricing. 

"I think people got confused that said 'because I believe in strong intellectual property, I don't believe in making medicines affordable and accessible,'" he told Cramer. "One has nothing to do with the other." 

RELATED: Allergan loses Restasis patent protections in federal court decision 

The drugmaker came under intense criticism for its September agreement with the Saint Regis Mohawk Tribe, through which it transferred Restasis intellectual property to the tribe in order to defend against an inter partes review at the U.S. Patent and Trademark Office. Because the tribe is a sovereign nation, it could claim immunity from the challenge.

Critics of the deal were out in force after the announcement, writing on social media and elsewhere that the agreement was "sleazy" and bad for the industry, among other opinions. Multiple lawmakers got involved, and Sen. Claire McCaskill, D-Mo., introduced legislation aimed at closing the "brazen loophole." 

But separate from that IPR review, the drugmaker has since lost a Restasis patent case in federal court against Mylan, Teva and Akorn. In that decision, a judge wrote that he had "serious concerns about the legitimacy of the tactic that Allergan and the tribe have employed." 

Importantly, no Restasis generics have won approval and Allergan has appealed the loss. Wells Fargo analyst David Maris wrote in a recent note that his team is taking a conservative assumption of generic entry in the first quarter of 2018.

On CNBC's Mad Money, Saunders sought to dispel what he thought was a "misunderstanding" about why the company did the deal. The helmsman last year famously touted pharma's "social contract" last year and has maintained in the face of widespread criticism that the agreement in fact lived up to that idea. 

Along with other prominent industry players, he's said the IPR system is in serious need of change and amounts to a "double jeopardy" of patent attacks on pharmaceuticals.