Tuesday, December 9, 2014

Despite Hospira's Spin Doctoring, Cubist's Patents Held. . . Valid -- Through Late 2016 At Least

UPDATED @ 7:45 AM EST -- Merck has taken the rather unusual step of proactively commenting on the Hospira Cubist ruling in Delaware. And, as you'll see -- what I said prior to 6 AM EST still holds. Merck confirms the accuracy of mine, below. Merck will make very good money on this deal, and I'll separately predict that there will be no topping bid offered. It is a fully-priced tender offer. [End, updated portion.]

Yesterday afternoon, at the federal trial court level in Delaware, there were some developments in the Hospira v. Cubist Hatch-Waxman proceedings (Cause No. 12-367). The very able Judge Gregory M. Sleet entered a memorandum opinion late in the day yesterday. . . and overnight, much was made of Hospira's claim that at least four three of Cubist's daptomycin patents were invalidated. This cheer-leading was led by Hospira. The statement is true -- but is not remotely complete -- nor is it even close to the end of the story.

Indeed, far less has been written (thus far) about the one central Cubist patent -- RE '071 -- (belonging to Cubist, via a year 2000 Lilly exclusive license) which was held valid, and held to be infringed, by Hospira's actions, and ongoing attempts at commercialization -- of a generic daptomycin injection. Of course, this is exactly the sort of ordered litigation Hatch-Waxman envisioned. Indeed, settling -- in an orderly, courtly fashion -- whether a generic may enter the market, and when, reduces chaos for all concerned. I suppose Hospira could still attempt an "at-risk" launch, but that would be decidedly unwise, given Judge Skleet's opinion of yesterday. The full 47 page PDF is right here, so you may read it for yourself -- but willful patent infringement leads to treble damages, in these cases. And so -- we will wait for appeals, and additional motions, but here is the business end of the opinion:

. . . .For the reasons stated above, the court concludes that: (1) the Certificate of Correction issued for the RE'071 Patent is not invalid, and therefore Hospira's products infringe the RE'071 Patent; (2) the RE'071 Patent is not invalid for lack of written description; (3) the RE'071 Patent is not invalid for improper recapture; (4) a revision to the court's claim construction of the term "daptomycin" in the '967, '689, '238, and '342 Patents is not warranted, and therefore Hospira's products infringe the '967, '689, '238, and '342 Patents; (5) the '967, '689, '238, and '342 Patents are not invalid for lack of written description. . . .

Now you know. Of course there will be appeals (on both sides), and Strides and Fresenius are still circling Cubist, as well. As I've said, Teva already extracted a daptomycin patent settlement -- and we shall have to wait and see if Teva is ever able to enforce it. So in the mean time. . . keep calm and carry on. Busy day ahead. . .

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