Merck’s last crack at salvaging a $2.5B jury verdict in hep C patent showdown is shot down by appeals court

In December 2013, Gilead announced the first pill that could cure hepatitis C. The same week, Idenix Pharmaceuticals announced it was suing Gilead for patent infringement, a lawsuit that would eventually demand over $2 billion from the US drugmaker.

Nearly six years later, that dispute appears to have finally concluded. In a decision that may ripple across pharma, a federal appeals court ruled Gilead – which acquired the hep c drug when it purchased Pharmasset in 2011 – did not owe damages to Idenix, now a subsidiary of Merck. The ruling affirms a 2018 reversal of a 2016 jury decision that originally awarded $2.54 billion to Idenix.

The decision removes a large thorn from Gilead’s hep-c side and all but ends Merck’s chances of salvaging something from their ill-fated $3.9 billion acquisition of Idenix in 2014. (As the hep C market rapidly crowded and sunk, Merck filed a $2.9 billion hit on the hep-c drug it acquired). But a decision may have a broader impact than just on the flagging hepatitis C market, affecting pharmaceutical innovation writ-large said Brian Fairchild, a life sciences intellectual property attorney at Goodwin Proctor.

“It continues a trend of striking down patent claims that are not narrowly focused on one specific drug,” Fairchild wrote in an email to Endpoints News. 

Drug companies have largely used patents to protect from competitors making exact or very similar copies of their drug, but recently biotechs and large pharmaceuticals have tried to use patents to stop other companies from hitting the same biological targets, Fairchild said. And it’s not yet clear if the law lets them do this.

So far the courts have decided against companies who have interpreted their IP this broadly because of two issues in US patent law: “written description” and “enablement.”

When AbbVie sued J&J over Stelara, an antibody that binds to IL-12, federal courts ruled that AbbVie’s patent failed the “written description” requirement – it did not describe the massive array of compounds that could bind to IL-12. When Amgen sued Sanofi and Regeneron over the PCSK9 antibody Praulent, a district court ruled Amgen had failed to reach the “enablement” requirement – the requirement stating a patent must have enough detail for a person trained in the field to be able to act on it. Amgen failed because the patent didn’t give enough guidance on which antibodies besides Amgen’s would bind there.  That ruling, which came on August 30, will likely be appealed.

The Gilead-Merck case raised similar questions for a different form of drugs, Fairchild said: chemicals. Idenix said that Gilead worked off its key insight that a class of molecules – 2′-methyl-up nucleosides – could be used to treat hep C. Gilead argued their patent was “overly broad” and “provides no guidance in determining which of the billions of potential 2′-methyl-up nucleosides are effective.”

Two out of three judges said Idenix failed on both of those requirements, enablement and written description. A third judge dissented on the grounds that the original jury had evidence to support their conviction, and he said the ruling “provides a new path of uncertainty and unreliability” for patents. Fairchild said that uncertainty is real but limited.

“Collectively, these cases are unlikely to affect an innovator’s ability to prevent others from copying a drug,” Fairchild said in an email “but they do call into question an innovator’s ability to prevent others from marketing a drug that is only modestly different.”

 

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