(TEVA/EGRX) Bendeka Trial Day 1: Teva Begins Bench Trial On Patents Covering Teva’s Bendeka; At Least Nine Years of Patent Coverage Potentially at Issue

Relevant Documents:
Proposed Pretrial Order
U.S. Patent No. 9,265,831
U.S. Patent No. 9,572,797
U.S. Patent No. 9,144,568
U.S. Patent No. 9,597,399
U.S. Patent No. 9,572,887

Reorg Pharma Recap
 

• Yesterday, Sept. 9, 2019, a Delaware court heard opening statements and fact witness testimony in Day 1 of the bench trial of Teva’s litigation against generic filers on Teva’s cancer drug, Bendeka.
   
• Teva and patent owner Eagle Pharmaceuticals are asserting formulation and method patents expiring in 2031 and 2033 against generic filers Apotex, Fresenius Kabi, and Mylan.
   
• If the generic filers prevail on all patents, generic entry could occur in December 2022; if Teva and Eagle prevail, generic entry could be blocked until 2031 or later.
   
• The Delaware judge’s comments indicated that he is unlikely to give significant weight to certain testimony from Eagle’s witnesses regarding “objective indicia” that the inventions are not obvious.
   
• The trial will resume today, Sept. 10 at 9:00 a.m. ET.
   

Yesterday, Sept. 9, 2019, Judge Colm Connolly of the United States District Court for the District of Delaware heard opening statements and fact witness testimony in a trial on Teva’s patent infringement claims against drug makers seeking to market generic versions of Teva’s cancer drug Bendeka. Teva licenses Bendeka from Eagle Pharmaceuticals, which owns the asserted patents.

Teva is asserting two 2031 formulation patents and two 2033 method patents against generic filers Apotex, Fresenius Kabi, and Mylan. These generic filers could potentially come to market in 2022 if the Delaware court finds the asserted patents invalid or not infringed.

Yesterday’s witnesses were Eagle’s CEO Scott Tarriff and Nagesh Palepu, Ph.D., a named inventor on two of the asserted patents. Much of the first day of trial was devoted to addressing evidentiary objections. Judge Connolly’s comments in resolving these objections indicated that he is unlikely to give significant weight to certain testimony from yesterday’s witnesses relating to Teva’s contention that “objective indicia” of non-obviousness support the validity of the asserted patents.

Below is a summary of (A) relevant background; and (B) Day 1 of trial.

Background

Teva, through its subsidiary Cephalon, markets the injectable cancer drug Bendeka (bendamustine hydrochloride) in the United States, through licenses from Eagle Pharmaceuticals. Bendeka is approved to treat chronic lymphocytic leukemia (“CLL”) and indolent B-cell non-Hodgkin lymphoma (“NHL”). According to a 2019 SEC filing, Eagle receives a 25% royalty on net U.S. Bendeka sales, rising to 30% in October 2019 and to 32% in 2021 and beyond.

Bendeka currently has orphan drug exclusivity (“ODE”) for both approved indications, preventing approval of generic bendamustine products until Dec. 7, 2022, though Bendeka’s entitlement to ODE is the subject of a pending appeal to be heard on Oct. 17, 2019.

Bendeka is a “rapid infusion” version of Treanda, also from Teva, a bendamustine injection product approved in 2008. Bendeka and Treanda are approved for the same indications and administered at the same dose, but Bendeka is administered at a higher concentration, using a smaller dilution volume and shorter infusion time.

There are 15 patents listed for Bendeka in the Orange Book: a 2026 purity patent (U.S. Patent No. 8,791,270), five 2031 formulation patents (U.S. Patent Nos. 8,609,707; 9,265,831; 9,572,796; 9,572,797; and 10,010,533) and nine 2033 method patents (U.S. Patent Nos. 9,144,568; 9,034,908; 9,000,021; 9,572,887; 9,579,384; 9,597,397; 9,597,398; 9,597,399; and 10,052,385).

The 2031 formulation patents generally cover non-aqueous liquid bendamustine compositions containing specified ratios of polyethylene glycol (“PEG”) and propylene glycol (“PG”) and a “stabilizing amount” of an antioxidant, which are stable in storage as indicated by low impurity levels. Some asserted claims in the 2031 patents specify the antioxidant monothioglycerol and some impose specific impurity limitations under certain storage conditions, for example, no more than 0.18% “total PG esters” after 12 months storage at 5 degrees Celsius.

The 2033 method patents generally cover methods of treating cancer using bendamustine liquid formulations administered in small volumes (typically 100 ml or less) over short infusion times (typically 15 minutes or less).

Beginning in 2017, Eagle, Teva, and Cephalon (collectively hereafter, “Teva”) filed several lawsuits in Delaware against companies seeking to market generic or competing versions of Bendeka.

Teva’s claims against Apotex, Fresenius Kabi, Mylan, and Slayback (collectively herein, the “Generics”) have been consolidated. Slayback is challenging only one of the 2033 method patents (U.S. Patent No. 9,572,887) and is not currently seeking approval before expiration of any other listed patents.

While all 15 Orange Book patents have been asserted in this litigation, the issues have been narrowed for trial to just five claims in two of the 2031 formulation patents (U.S. Patent Nos. 9,265,831 and 9,572,797) and six claims in three of the 2033 method patents (U.S. Patent Nos. 9,144,568, 9,597,399, and 9,572,887). One of the 2033 patents is asserted against Slayback only. The Generics are primarily challenging the validity of the asserted patents, infringement is disputed only for some of the asserted claims.

During opening statements, the Generics stated that Teva recently filed terminal disclaimers with the patent office, under which the 2033 method patents would expire in 2031. However, the patents remain listed in the Orange Book as expiring in 2033.

Apotex is a confirmed first-filer for Bendeka, while Fresenius and Slayback are likely first-filers; these companies are potentially eligible for shared 180-day exclusivity.

If a generic filer prevails on all of the 2031 and 2033 patents, it could receive final approval and launch after expiration of Bendeka’s ODE in December 2022 (or earlier, if the FDA prevails in its appeal). If Teva prevails on some or all of its patents, generic competition may be blocked until 2031 or 2033.

Summary of Day 1 of Bendeka Trial

Opening Statements

Opening statements were presented by David Berl of Williams & Connolly LLP, counsel for Teva, on behalf of Teva and Eagle, and by Imron Aly of Schiff Hardin LLP, counsel for Fresenius, on behalf of the Generics.

Teva’s opening statement focused on the many challenges allegedly involved in developing the claimed bendamustine formulation. Berl explained that, in the 50 years between the invention of bendamustine and the development of the Bendeka formulation, bendamustine was sold in a freeze-dried, or “lyophilized,” form, that needed to be “reconstituted” into a liquid form before use. The Bendeka formulation, covered by the 2031 formulation patents, is a ready-to-use formulation that did not require reconstitution. According to Berl, the “path to invention” for this formulation was “anything but simple,” and was not supported by the prior art. In fact, he claimed, the Bendeka formulation was one of the most challenging projects the inventors had undertaken.

Berl then walked through the steps needed to reach this invention, including choosing a non-aqueous system over an aqueous system, choosing non-aqueous solvents and the relative ratios of each, and deciding to add an antioxidant. According to Berl, the inventors’ choices “diverged wildly” from the prior art. For example, even if a non-aqueous formulation were chosen, the prior art indicated that “polar protic” solvents like PEG and PG should be avoided because they promote degradation. Further, bendamustine’s solubility in PEG was unknown, which was important due to the possibility of dangerous precipitants if the compound is not soluble.

Berl also discussed the challenges in developing a stable liquid bendamustine formulation, claiming that the inventors were engaged in “chemical whac-a-mole,” since strategies that would slow some degradation reactions would speed up others.

Berl contended that the Generics’ obviousness argument is based on “hindsight-guided explanations.” According to Berl, the Generics’ argument ignores degradation reactions at bendamustine’s nitrogen mustard groups, which the prior art indicates are accelerated by PEG. Instead, Berl claims, the Generics rely upon a flawed “OH-group theory,” which does not actually support using a high PEG to PG ratio. According to Teva, the potential problems involved in using PEG and PG solvents would have led a POSA to abandon these protic solvents altogether. With respect to the use of an antioxidant, Berl stated that antioxidants were considered “unpredictable and unreliable,” noting a reference stating that antioxidants should only be used if it could not be avoided. Finally, Berl claimed, the prior art does not provide any expectation of success in developing the patented formulation, noting that there is not a single formulation containing both PEG and an antioxidant. Accordingly, Berl claims, the Generics’ argument on expectation of success relies upon internal Eagle data, which cannot be used as prior art.

The 2033 method patents, Berl claimed, cover a low-volume, rapid infusion method that was considered “infeasible and undesirable.” According to Teva, the invention was intended to address a shortage of chemotherapy infusion chairs by shortening the time that patients would need to complete their infusions. Berl pointed out that while Bendeka uses an infusion volume of 50 ml, a concentration ten times higher than used to administer Treanda, Eagle’s initial experiments suggested that even dilution into a 100 ml volume would not be possible. According to Berl, there is no prior art suggesting that this method would work and, in fact, suggested it would be a “bad idea” due to certain adverse effects. Berl stated that companies around the world independently decided to use a longer infusion, and consistent with this, Eagle met resistance to the idea. Despite this skepticism, Berl claimed, Bendeka has been a “smashing commercial success,” generating over $2 billion since launch.

Aly began the Generics’ opening statement with the comment that, while Bendeka is a “great drug,” this case is not about the invention of bendamustine, which was invented in the 1960s, but merely about the development of a higher-concentration formulation. According to Aly, the development of the Bendeka formulation was not as complicated as Teva claimed, the prior art disclosed that bendamustine was unstable in aqueous solutions and specifically proposed using “polyol” solvents, of which there were only three options that had been approved by the FDA. Aly noted that Eagle had started work on its formulation in July 2009, and by January 2010, had both identified the lead formulation and filed a patent.

Regarding the 2033 method patents, Aly claimed that the prior art taught doctors that they could use faster infusion times if they wanted to. Aly noted a 1985 reference describing only “mild side effects” with a shorter infusion time, as well as Eagle’s own communications to the FDA characterizing the literature in the same way. Aly also downplayed the impact of a shorter infusion time on quality of life, noting that the infusion accounts for only part of the patient’s visit, which also includes check-in and recovery time.

Addressing Teva’s claims of commercial success, Aly claimed that Teva simply converted Treanda patients to Bendeka while pricing Bendeka 14 to 16 percent lower than Treanda, an approach that does not suggest that Bendeka was not a better product.

Testimony of Scott Tarriff, CEO of Eagle Pharmaceuticals

Teva’s first witness was the CEO of Eagle Pharmaceuticals, Scott Tarriff. Berl conducted the direct examination, while Kevin M. Nelson of Schiff Hardin LLP conducted the cross-examination.

Tarriff’s testimony related primarily to Teva’s arguments regarding the objective indicia of non-obviousness supporting the validity of the patents. Tarriff testified that Eagle initially sought to develop a new bendamustine formulation that would not require reconstitution, which was a laborious process involving potential exposure to a cytotoxic drug. Eagle then worked with a company called SciDose to develop the ready-to-dilute Bendeka formulation, and was eventually successful.

While Eagle was initially just trying to eliminate the reconstitution step, Tarriff testified that, around 2012, he had the idea to reduce the infusion time required for bendamustine administration. Tarriff learned that there was a “chair shortage” problem in chemotherapy and Eagle sought to address this problem by reducing the infusion time. Tarriff then recounted various instances purportedly reflecting skepticism that the product could be successfully developed. According to Tarriff, Eagle’s chief scientist (one of the inventors on the 2033 patents) Sri Sundaram raised concerns that a shorter infusion time would cause local irritation and that dilution into a smaller volume might be difficult. In resolving an objection to Tarriff’s testimony regarding Sundaram’s alleged skepticism, Judge Connolly commented that, while the testimony might be relevant, “I’m not going to give it much weight,” and that it might be “self-serving.” Judge Connolly indicated that expert testimony on industry skepticism would carry more weight, but that it was Teva’s choice how to use its trial time.

Tarriff further testified that the Hackensack Cancer Center declined to participate in a proposed clinical trial. Following an objection to this testimony, Judge Connolly determined that Teva’s expert had not relied upon this alleged instance of skepticism in his report. The Judge then allowed the testimony but commented, “I think the fact that your own expert doesn’t rely on it tells me a lot.” Tarriff testified that “at least a couple dozen investors” declined to invest in the product. Eagle then approached Teva with a proposal to license the product. Teva initially declined, citing the risk-reward balance for the product, but in February 2015 took a license after Bendeka received FDA approval.

On cross-examination, Nelson presented Tarriff with several communications and references suggesting a lack of concern about the use of a shorter infusion time, including from an Eagle scientist who opined that reducing infusion time from 30 minutes to 15 minutes “would most likely not have an impact.” In response to questions from Nelson, Tarriff acknowledged that Eagle was not the first to administer bendamustine in under 30 minutes and that, in 2012, it was known that a 3-minute infusion was associated with the same adverse effects as a 30-minute infusion.

Tarriff was also shown communications suggesting that a shorter administration time may not be a significant improvement, including from an oncologist who noted that bendamustine was almost always given in combination with another drug, which had a 30-minute infusion time.

Relevant to Teva’s arguments regarding commercial success of Bendeka, Tarriff also acknowledged that the license to Teva was part of a settlement of a patent infringement lawsuit filed by Teva. Tarriff was also confronted with a statement from an investor call in which he stated that he was “pleased with Teva’s ability to rapidly convert the market to Bendeka.”

Testimony of Nagesh Palepu, Ph.D.

Teva’s second witness, Nagesh Palepu, Ph.D., is one of the named inventors on the 2031 formulation patents. Eagle’s counsel Dan Brown of Latham and Watkins LLP conducted the direct examination, while Steven Feldman of Hahn Loeser & Parks LLP, counsel for Apotex, conducted the cross-examination.

Palepu testified about his work with co-inventor Phillip Buxton, Ph.D., in developing the ready-to-use bendamustine formulation that became Bendeka. This testimony focused on the difficulties encountered, in an attempt to refute the Generics’ argument that the invention would have been obvious from the prior art.

Palepu testified that he initially suggested stabilizing bendamustine using a high-chloride containing medium, an approach he had used successfully with cisplatin, another nitrogen mustard compound. Palepu found that chloride reduced solubility and increased stability, then conducted more experiments, ultimately finding that chloride alone would not be sufficient. He characterized the effect of chlorine as “day and night” compared to his experience with cisplatin. Palepu then moved on to numerous other solvents and solvent combinations. Bendamustine did not behave “predictably,” he testified. According to Palepu, developing the formulation required understanding how different solvents interact with bendamustine.

While the inventors eventually used PEG as a solvent, Palepu testified that he did not have any theory about why PEG would work as a solvent. According to Palepu, he and Dr. Buxton noticed that the PEG solvent was associated with a deschloroethyl degradation product that Dr. Buxton believed resulted from an oxidation reaction, which suggested the use of an antioxidant. Palepu testified that, prior to this observation, he thought an antioxidant “may” work, but would need to be tested. In a December 2009 progress report, he suggested adding PG to improve solubility, but according to Palepu, it was still necessary to assess whether this solvent resulted in any additional degradants.

It was only in the 77th experiment that the inventors first used the ingredients ultimately used in Bendeka. Palepu stated that the project involved “very complicated chemistry” that “took a long time to understand.”

Of note, in addressing an objection to the relevance of Palepu’s testimony regarding his development of the patented formulation, Judge Connolly stated that his “inclination” is “not to give a lot of weight to the testimony of the patentees, which can be self-serving,” and that he is more interested in hearing about the prior art.

Feldman began a cross-examination of Palepu before Judge Connolly adjourned the trial for the evening. The examination focused on the “Olthoff” reference, which disclosed a non-aqueous bendamustine formulation. Feldman established that Palepu received the Olthoff reference in July 2009, then directed his team to explore solvents including PEG and PG.

The trial will resume today at 9:00 a.m. ET.