Chalk up a win for Eli Lilly in a much-watched patent tussle over the blockbuster cancer med Alimta. A federal appeals court said generic versions from Teva and others would step on a key Lilly patent, a decision that could shield the company's big seller until 2022.
Lilly’s “vitamin regimen patent” has been “confirmed in every validity challenge to date,” Michael J. Harrington, the company's SVP and general counsel, said in a statement. The decision by the U.S. Court of Appeals for the Federal Circuit follows two earlier wins at the appellate level.
If the company survives all remaining challenges, it’ll have exclusivity on the drug until May 2022.
At issue is a patent that protects Alimta's use alongside vitamin B therapy. Taken without the vitamins, Alimta can potentially cause fatal side effects, and Lilly argued that its work to find a solution warrants the IP shield. Teva contended that adding the vitamins to the regimen was simply a logical next step.
Eli Lilly’s new patent win is an “important benefit” to the company's sales growth forecast of at least 5% through 2020, according to Leerink Partners analyst Seamus Fernandez.
Bernstein analyst Tim Anderson wrote that the ruling is the first of several pivotal events Lilly faces in 2017, with another potentially coming midyear in the form of an Alimta inter partes review, “where, in principle, the evidentiary bar is lower.”
An inter partes review is a new type of patent challenge heard by a U.S. Patent and Trademark Office appeals board, not a federal court.
“In general, most IPR challenges are denied, so hopefully Eli Lilly prevails here, too,” he wrote. But if it doesn’t, Lilly’s “share price could dip by as much as 10%, given Alimta's importance” to the company’s financials, he figures.
If Lilly did suddenly lose Alimta's patent shield, the loss would hit earnings per share by 15% between 2017 and 2022, Anderson said.
Used to treat advanced non-small cell lung cancer and mesothelioma, Alimta is a top seller for the drugmaker, pulling in nearly $2.5 billion in 2015 sales. Through the first 9 months of 2016, it delivered $1.74 billion in sales.
While it’s surely a relief to bat down an appeal, Eli Lilly's patent has survived several court challenges. In April 2014, Eli Lilly prevailed when a federal judge decided the unusual patent on the med was valid. More than a year later, in August 2015, the U.S. District Court for the Southern District of Indiana agreed and concluded that the proposed generics would violate Lilly’s intellectual property.
But while Lilly has posted multiple wins in the U.S., it hasn’t been as lucky across the Atlantic. A U.K. court early last year said Actavis—which has since been bought by Teva—could go ahead with its generic launch.
Editor's note: This story was updated with analyst comments.