A Split CAFC Panel Confirms that Mylan can Dodge Takeda's Injunction...

Gaston Kroub

Back in 2012, Japanese pharmaceutical giant Takeda announced that it was purchasing URL Pharma for the princely sum of $800mm USD. Takeda’s main prize was gout treatment Colcrys, the blockbuster branded version of the ancient drug colchicine. A drug that was previously available for pennies a pill, only to jump up to $6/pill based on FDA exclusivity procured by URL Pharma. In support of its goal to maintain its monopoly pricing on Colcrys, Takeda embarked on a patent assertion effort in the hopes of staving off generic competition. Unfortunately for Takeda, those cases did not go too well.

The challenges to Takeda’s colchicine monopoly advanced on two fronts. One challenge came via the traditional Hatch-Waxman route, led by generic stalwart Mylan. The second challenge was launched by Hikma, via the § 505(b)(2) New Drug Application route. Once Hikma received approval to market Mitigare®, its Colcrys competitor, Takeda sued it on 8 patents, only to lose in December 2018 when the district court in that case found no infringement by Hikma of the 3 patents that were still in the case at that point. Takeda didn’t appeal that ruling and Mitigare is available for sale.

Back to Mylan. It too was sued by Takeda, on seventeen patents. The parties settled in November 2017, with Mylan allowed to sell a generic Colcrys on the earlier of a (confidential) specified date, or if Takeda was unsuccessful asserting its patents against a third-party in the future. Put another way, once Takeda was determined to have lost a patent case against a third-party — such as Hikma — Mylan would be free to launch its generic. And when Hikma successfully beat back Takeda’s patent case, Mylan informed (in November 2019) Takeda that it planned to immediately launch its generic.

Takeda responded by going nuclear. It sued Mylan for breach of contract and patent infringement, while also moving for a preliminary injunction to block Mylan’s sales. Takeda lost on the injunction, a decision just affirmed by the Federal Circuit. In doing so, the a split Federal Circuit panel rejected three Takeda arguments.

First, it found the fact that Mitigare was applied for under a different approval route than Mylan’s generic Colcrys to be of no moment. Second, it confirmed that Takeda’s loss to Hikma - even though the final decision was limited to three of the eight patents originally asserted - was a proper trigger under the Mylan settlement agreement for Mylan to start selling its generic. The majority did not think it would be fair to construe the agreement to give Takeda the option of keeping off the market by asserting patents against a third-party and then withdrawing at least one of those patents to prevent a final decision. Finally, it rejected Takeda’s argument that a Mylan launch would cause it irreparable harm that money damages couldn’t cure. The net result — affirmance of the denial of the preliminary injunction.

In dissent, Judge Newman centered on the fact that Mitigare was already approved — and the subject of significant litigation activity between Hikma and Takeda — at the time the Mylan settlement was agreed to. Importantly, there was already an indication that Hikma’s product would be found non-infringing at that point, which made it impossible — at least to Judge Newman — that Takeda had contracted with Mylan that a defeat to Hikma, on a different colchicine product, would trigger Mylan’s launch.

At bottom, the decision illustrates the challenges faced by patent owners in procuring injunctions — especially in the biopharma space. In light of the Federal Circuit’s decision, patent owners in Takeda’s position would do well to ensure that when a triggering event is included in a generic entry settlement agreement, any pending litigations with third-parties that are not intended to act as a trigger are specifically excluded. Yet again, we see that settlement agreements matter, no only to end ongoing disputes, but also because they can have future ramifications for everyone involved.