- A U.S. patent board declined to review key patents held by Celgene on its top-selling multiple myeloma drug Revlimid, denying petitions Monday from Indian drugmaker Dr. Reddy's that sought to begin a process to overturn them.
- The decisions, posted online Monday, make the prospects of a cheaper copycat entering the U.S. market before 2022 more remote, although ongoing district court litigation between Celgene and Dr. Reddy's still presents a risk to the biotech's sales forecasts for the blockbuster drug.
- Shares in Celgene rose by about 2% on Monday, while Dr. Reddy's stock dropped by nearly 6%. The patent victory, while not unexpected, could also serve to boost investor confidence in Bristol-Myers Squibb's decision to buy Celgene for $74 billion. Sales forecasts for Revlimid were a key uncertainty facing the pharma in valuing Celgene.
Revlimid (lenalidomide) ranks as one of the world's best-selling drugs, earning nearly $10 billion in revenues for Celgene last year.
But the drug is also nearing the end of its patent-protected monopoly, with protection on its composition of matter set to expire at the end of 2019. A 2015 settlement deal between Celgene and Natco Pharma would allow for limited generic entry beginning in March 2022, and full generic sales permitted at the beginning of 2026.
Dr. Reddy's, though, seeks to launch before those dates, engaging Celgene in a two-pronged challenge in district court and at the U.S. Patent Office.
Monday's decision largely sets back the latter of those efforts.
The Patent Trial and Appeal Board (PTAB), a division of the Patent Office, declined to initiate what's known as an inter partes review of three patents on use of Revlimid in myelodysplastic syndromes, all of which are set to expire in 2023.
If the PTAB had agreed to review and subsequently overturned those patents, Dr. Reddy's would have been in a much stronger position in its district court litigation — currently in discovery phase.
"This does not guarantee that Dr Reddy’s will not seek to invalidate the patents by other means, nor does it mean that Dr Reddy’s will automatically lose in those proceedings," wrote SVB Leerink analyst Geoffrey Porges in a Feb. 11 note to investors.
"However, it does mean that the path to early market introduction for Dr Reddy’s is now appreciably slower, and more difficult, as it is for other potential generic filers."
Celgene still faces one other inter partes review challenge from Alvogen on a method-of-use patent for Revlimid in multiple myeloma. A decision is expected in the coming weeks, according to analysts at SVB Leerink.
In district court, Dr. Reddy's aims to establish that its generic Revlimid copy does not infringe on another patent held by Celgene that runs through 2027.
Celgene management has said the earliest a potential trial decision could come is the fourth quarter of 2019.
The PTAB outcome also benefits Bristol-Myers, which is counting on the billions in cash flow that will be generated by Revlimid to pay down the debt it's taken on to buyout Celgene.
"We believe the positive rulings should put the [Bristol/Celgene] deal in a better light for investors and potentially opens up a greater possibility of a settlement that is favorable for Bristol/Celgene," wrote Credit Suisse analyst Vamil Divan in a Feb. 11 investor note.
Once closed, that deal would bring Revlimid together with Bristol-Myers' Opdivo (nivolumab) in a market-leading cancer drug portfolio, albeit one with notable challenges ahead of it.