High-stakes PCSK9 patent case hits court, and oddsmakers weigh the arguments for winner

Predicting a court’s decision based on oral arguments is a dicey-yet-irresistible proposition. Just check out the chatter after Tuesday’s PCSK9 patent hearing in Washington, D.C. 

Some stock analysts and legal experts said the oral arguments—and questioning and body language and other multitudinous variables—favored Amgen. Others walked out of the Federal Circuit courtroom believing Sanofi and Regeneron have the edge.

It’s a closely watched fight over two PCSK9 patents and, by extension two rival cholesterol drugs that could be blockbuster earners. Some 150 people packed the courtroom to hear the arguments. It’s a high-stakes fight for the companies involved, too; if Amgen wins this appeal, Repatha could end up with the PCSK9 market all to itself.

RELATED: Lilly, Pfizer, et al. back Sanofi and Regeneron in PCSK9 patent appeal. AbbVie doesn't

“We see 80% chance that Amgen will win the case,” Bernstein analyst Ronny Gal wrote in a Tuesday note. Mizuho Securities’ Salim Syed said his firm’s legal consultant “stated that he believes the probability of Amgen prevailing ... is 55%.”

Evercore ISI Group analyst Umer Raffat, however, leaned the other way: “On the margin, we walked out of the hearing feeling that case is leaning more towards Regeneron,” Raffat noted, but qualified that choice, saying, “[W]e also acknowledge that patent cases are nearly impossible to call with high conviction.”

At issue in the U.S. appeals court, which hears all patent appeals, are patents related to PCSK9 and the drugs that exploit that molecule to fight high cholesterol, namely Amgen’s own Repatha and Sanofi and Regeneron’s Praluent. At the trial level, Amgen won an injunction earlier this year that could have pushed Praluent off the market, but that was put on hold pending appeal. When the court fight was proceeding, analysts figured the two sides would settle on royalties—sizable ones—but so far that hasn’t happened yet.

RELATED: Regeneron CEO: Amgen's disruptive Praluent-blocking patent move hurts patients

In the courtroom, the arguments boiled down to this, Mizuho’s Syed wrote: “Regeneron essentially argued that Amgen’s claims were too broad and therefore lacked written description on the invention. Amgen argued that the PCSK9s ... while different, were similar enough, and that anyone skilled in the art could tweak a molecule just enough to be different but still be materially the same.”

There were two other differences noted by Mizuho’s consultant, too. A legal side, which he believes favors Amgen, and an “emotional/policy side,” which he figures would favor Regeneron and Sanofi. The latter side has been articulated by Regeneron CEO Len Schliefer, at least partly: Giving patients and doctors a choice between Praluent and Repatha is a good thing, particularly when his company’s med is available at a lower dose and the Amgen med isn’t.

Bottom line? That juxtaposition of law and emotion, the Mizuho note said, makes “the outcome ... particularly difficult to predict.” (And, according to this lawyer, the chief judge on the appeals panel, Sharon Prost, has something of a policy bent, whereas Judge Richard Taranto seemed to appreciate the science.)

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Gal, for his part, set out the questions the judges are set to answer: “[D]id the district court make poor process decisions which materially hindered Regeneron’s ability to make its case; and ... what are the minimal requirements to patenting an antibody binding site on a known antigen?”

The latter question could end up affecting biopharma in general. It’s essentially why so many other drugmakers filed friend-of-the-court briefs. They don’t like the idea of antibody patents that cover the way antibodies work, rather than the specific structure of specific antibodies. Eli Lilly and Pfizer, for instance, argued in their amicus briefs that upholding Amgen’s patent here would endanger drug development, because one drugmaker could essentially stake a claim to an entire class—and that, in turn, would hurt patients, because medications of the same type can still work differently in different patients.

RELATED: Is the PCSK9 patent fight giving Amgen's Repatha a boost? Script numbers say so

Amgen, however, has said just the opposite (and an AbbVie brief filed in the case agreed): Striking down the patent endangers R&D spending because strong patents give pharma companies more certainty of payoff for their investments. Patent protection may mean drugs cost more in the short run, AbbVie said in its brief, but that’s the price of developing new and complex biologic treatments.

Which brings us to the beyond-the-courtroom dynamics of this case. Repatha and Praluent hit the market as all-but-certain blockbuster-earners for their companies, but so far, those rollouts aren’t hot tickets, partly because of payer foot-dragging, partly because of price tags, which run north of $14,000 on a list basis, but far lower in the real world. Some outcomes data recently posted by Amgen’s Repatha—and forthcoming for the Regeneron and Sanofi drug—could help turn the tide, but that’s not guaranteed. As Raffat noted Tuesday, “The bigger issue remains:  PCSK9 launches not going well so far.”

A decision could come as early as the fall; then again, it might take six months for the appeals panel to hand down its ruling.