Three patents that extend the exclusivity of Alexion Pharmaceuticals’ franchise rare disease drug will now face a patent challenge from Amgen.
On Friday, a court within the US Patent and Trademark Office agreed to a review of Amgen’s claims that three Alexion (NASDAQ: [[ticker:ALXN]]) patents covering its drug, eculizumab (Soliris), were anticipated or obvious, and are therefore invalid. The announcement from the Patent Trial and Appeals Board kicks off a court proceeding that could take up to one year to decide. The outcome could determine when Amgen (NASDAQ: [[ticker:AMGN]]) will be permitted to launch its own biologically similar product, or biosimilar, to compete with the Alexion drug.
Shares of Boston-based Alexion fell on the news and finished the trading day at $100.76, down more than 10 percent.
Eculizumab is an antibody drug that has won FDA approval to treat paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS), two ultra-rare blood diseases. In 2018, eculizumab generated $3.6 billion of the company’s $4.1 billion in net sales.
The original patent covering the composition of the Alexion drug expires in 2022. In a research note, SVB Leerink analyst Geoffrey Porges notes that the three patents Amgen is challenging are secondary patents issued after the drug’s original patent. These patents extend the exclusivity of the drug to 2027. The secondary patents cover the composition of the active ingredient in eculizumab, the drug’s formulation, and its use to treat certain diseases, including PNH.
Alexion is already feeling competitive pressures in some geographic markets. The company notes in its first quarter 2019 report that Russian regulators earlier this year approved an eculizumab biosimilar for treatment of PNH and aHUS. The filing goes on to say that if another company wins Russian approval, the two biosimilars would effectively prevent Alexion from selling eculizumab in that market due to pricing pressure.
Amgen filed its challenge to the eculizumab patents in February, according to Alexion securities filings. The Patent Trial and Appeals Board decision to proceed with a review surprised some Wall Street observers, many of whom didn’t expect Amgen’s challenge would get this far. Porges said in the research note that he viewed Alexion’s US patents for its drug as valid and enforceable. The patent review “doesn’t mean that an early biosimilar entry is inevitable, just that it is potentially more likely now than it was before,” he wrote.
Porges noted that Alexion can defend its drug from competition in multiple ways, including further litigation, the marketing exclusivity it was granted for commercializing a drug treating an “orphan disease,” and the potential to switch patients to another patent-protected drug in its portfolio, ravulizumab (Ultomiris). That drug won FDA approval late last year for PNH. In April, Alexion filed for FDA review of the drug as a treatment for aHUS.
RBC Capital Markets believes that Alexion’s patents will be upheld, given the track record of similar intellectual property reviews of antibodies. In a research note, RBC analyst Kennen MacKay wrote that even in a worst case scenario in which all three eculizumab patents are voided, ravulizumab should protect Alexion’s revenue stream. As of July 22, 40 percent of US patients with PNH had switched from eculizumab to ravulizumab, he wrote. Jana Fuller of Raymond James expressed a similar view of the proceeding, which is called an inter partes review (IPR).
“By the time the IPR decision is rendered, let alone while a potential appeal is ongoing, we expect a preponderance of the patients will already be on Ultomiris in PNH and perhaps aHUS as well,” Fuller wrote
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