Cinacalcet – USA

Cinacalcet – USA

On May 02, 2019 Delaware court denied Amgen’s request for preliminary injunction as it failed to show a likelihood of success on its claim that Cipla breached the agreement by selling the product.

Background:

Cipla “at-risk” launched their generic cinacalcet drug product, prior to the expiration of US 9,375,405 (the ‘”405 patent”), which is owned by Amgen. In earlier litigation, Amgen alleged that the Cipla product infringes Amgen’s ‘405 patent. The parties settled the prior case by executing an agreement (the “Amgen-Cipla Agreement”), by which, among other things, Cipla agreed that: (i) the Cipla Product infringes the ‘405 patent, (ii) the claims of the ‘405 patent are valid and enforceable, (iii) Cipla will not (except under limited circumstances) begin to market the Cipla Product until 97 days before expiration of the ‘405 patent, and (iv) the Cipla Product will be licensed from on and after that agreed-upon launch date.
But other ANDA filers went to trial with respect to US’405 patent. The Honorable Mitchell S. Goldberg, issued a detailed opinion on Aug 24, 2018 finding that Teva & Piramal do not infringe & Zydus infringes the ‘405 patent. On Dec 28, 2018, Teva began to sell its product, although several days later Teva entered into a settlement agreement (Jan 02, 2019) with Amgen, by which it purportedly agreed to stop selling the Teva Product.  Under this Agreement, and despite having prevailed at trial and obtained a final judgment of non-infringement, Teva stipulated that the Teva product does infringe the ‘405 patent, which Teva further stipulated was valid and enforceable. Teva also agreed to pay Amgen up to $40 million dollars, depending (in part) on how long the cinacalcet market remains free of non-Amgen and non-Teva generic products, and appears to have agreed to stop selling the Teva Product.
Shortly after Teva’s brief entry and exit from the market, Cipla on Jan 08, 2019 filed the instant suit, seeking a declaratory judgment that, under the terms of the Amgen-Cipla Agreement, and due to circumstances arising from the launch of the Teva Product, Cipla now had the right to launch the Cipla Product. When, soon thereafter, Cipla did begin to sell and offer for sale its Cipla Product, Amgen filed a motion for a preliminary injunction based on breach of contract.
Court’s analysis:

A preliminary injunction is “extraordinary” relief. It may be awarded only after the Court considers whether the moving party is likely to succeed on the merits of its claim, whether the moving party is likely to suffer irreparable harm in the absence of preliminary relief, the balance of equities between the parties, and the public interest.
Amgen seeks a preliminary injunction based on its claim that Cipla’s launch of the product constitutes a breach of the Amgen-Cipla Agreement. Court said it will be necessary to discuss and dissect multiple provisions of the Amgen-Cipla Agreement. Specifically, Section 5.6 of the Amgen-Cipla Agreement reads as follows:
[1] Nothing in Section 5.5 or in this Settlement Agreement shall be construed to prevent Amgen from seeking any relief it is legally entitled to, including but not limited to damages and/or a permanent injunction, provided that Amgen can only seek such relief against the Defendants if Defendants launch Defendants’ Product following a Third Party At Risk Launch, and if each Third Party with respect to its respective Third Party At Risk Launch (which At Risk Launch is either before or after an at risk launch by Defendants) is later found to infringe, or admits infringing, a valid and enforceable claim of the ‘405 patent and each such Third Party is required to pay, or agrees to pay, damages relating to its At Risk Launch.

[2] Notwithstanding anything to the contrary in this Settlement Agreement, if [i] any Third Party that has made an At Risk Launch of a Generic Cinacalcet Product (where such At Risk Launch is before or after an at risk launch by Defendants) is not found to have infringed one or more valid and enforceable claims of the ‘405 patent or [ii] has not ceased or agreed to ceaseselling such Generic Cinacalcet Product following an At Risk Launch, then Amgen shall not be entitled to seek or recover any relief from Defendants for Defendants’ at risk sales, offers for sale, distribution, or importation of Defendants’ Product.

Amgen, largely relying on the first sentence [1] of Section 5.6, contended that “[n]othing” in the Amgen-Cipla Agreement prevents it from seeking “any relief’ against Cipla, including a preliminary injunction, except that Amgen can seek such relief against Cipla only if a third-party which launched its own product – here, the Teva Product – “is later found to infringe, or admits infringing, a valid and enforceable claim of the ‘405 patent and … is required to pay, or agrees to pay, damages relating to its At Risk Launch.”
Cipla, by contrast, relied almost entirely on the second sentence [2] of Section 5.6. Because sentence [2] begins “[n]otwithstanding anything to the contrary in this Settlement Agreement,” Cipla insists that if its launch is authorized by this single sentence, then the Court need not be concerned with any other provision in the Amgen-Cipla Agreement, as this one sentence unambiguously authorizes the launch of the Cipla Product. Cipla further contends that this sentence [2] prohibits Amgen from seeking any relief- including a preliminary injunction, as well as damages following final judgment – for two independently sufficient reasons: (1) because Teva has been “not found to have infringed” the ‘405 patent; and (2) because Teva “has not ceased or agreed to cease selling” the Teva Product.
Court ultimately agreed with Cipla & said that Sentence [2] has essentially dispositive effect. Court said that Sentence [2] begins “[n]otwithstanding anything to the contrary in this Settlement Agreement.” The clear and unambiguous meaning of this phrase is that regardless of whatever else one might find in any other provision or sentence of the Amgen-Cipla Agreement, the consequences of sentence [2] must be enforced. Moreover, there is no conflict between sentences [1] and [2]. Instead, the two sentences contain different restrictions on rights Amgen would otherwise have to seek relief from Cipla. It is necessary for Amgen to survive the restrictions of sentence [ 1] in order to obtain the relief it is seeking – but surviving those restrictions is not a sufficient  condition for obtaining such relief (where, as here, such relief is independently precluded by sentence [2]).
Court next said that Sentence [2] restricts Amgen if either condition [i] or [ii] is satisfied. The parties’ next dispute involves how to read the conditions set out in sentence [2]. Amgen contended that the sentence [2] restriction on its entitlement to seek or recover relief relating to Cipla’s At Risk Launch applies only if both of the conditions set out in sentence [2] are satisfied. Cipla, by contrast, asserted that Amgen is restricted by sentence [2] if even just one of the conditions of sentence [2] is met. Court held that this sentence clearly and unambiguously sets out two separate conditions, [i] and [ii], either of which, if satisfied, render applicable the restriction on Amgen contained in this provision. Sentence [2] uses the word “or” and so expresses two conditions, each of which is sufficient to bar Amgen from obtaining relief. Amgen’s reading would, instead, effectively change the “or” to “and,” requiring that the “then” consequence apply (and restrict Amgen) only if [i] and [ii] occur. But the Court is not permitted to rewrite the parties’ clear and unambiguous contractual language.
Court further said that Condition [i] has been satisfied as Teva has been “not found to have infringed“. In the earlier litigation, after trial and post-trial briefing, Judge Goldberg entered final judgment that “Watson [Teva] does not infringe any of the claims asserted against it.” Section 5.6’s reference to “not found to have infringed” does not require the finding of non-infringement to be a “Final Court Decision,” as that term is defined in the Amgen-Cipla Agreement. The Amgen-Cipla Agreement requires exhaustion of appellate rights in order for there to be a Final Court Decision. But the term “Final Court Decision” does not appear in Section 5.6. Instead, the parties (presumably deliberately) here used the undefined term “not found to have infringed,” which is exactly what occurred in the District Court patent litigation.
Court further said that Amgen is not entitled to “seek or recover any relief’ for Cipla’s At-Risk Launch. Amgen in another effort to evade the restriction of sentence [2] of Section 5.6 argued that this provision restricts Amgen only from seeking permanent injunctive relief and does not also bar Amgen from prevailing on its preliminary injunction motion. The Court disagreed & said that the plain language of sentence [2] precludes Amgen from seeking “any relief’ if the conditions of the provision are satisfied. As the Court has already explained, condition [i] is satisfied. Preliminary injunctive relief is indisputably a type of relief and, therefore, is within the scope of “any relief.” Therefore, Amgen is precluded from seeking (and precluded from recovering) preliminary and permanent relief in relation to Cipla’s At Risk Launch of the Cipla Product.
Court further said that Condition [ii] will be treated as satisfied because of uncertainty as to whether Teva has “not ceased or agreed to cease selling” must be construed as Teva not ceasing or agreeing to cease selling. In pertinent part, Section 5.6 provides that if a third party that has made an at-risk launch “has not ceased or agreed to cease selling” its generic product, then Amgen is barred from seeking relief against Cipla for Cipla’s At Risk Launch. Hence, for condition [ii] to be satisfied – making applicable the restriction on Amgen’s ability to seek relief against Cipla – Teva must not have ceased nor have agreed to cease selling the Teva Product. While it may be that Teva has, in fact, ceased and/or agreed to have ceased selling its generic product, the record is not sufficiently clear, and at this stage doubts must be resolved against Amgen.  The record does establish, then, that Teva has ceased direct sales of the Teva Product, meaning that no additional dosages of the Teva Product have been injected into the market since January 2. However, that does not necessarily mean that indirect sales – in the form of those same dosages originally directly sold by Teva on or before January 2 moving through the drug “pipeline” (e.g., to wholesalers, pharmacies, and end users) – have also ceased. In fact, it is undisputed that ( at least as of the April 2 hearing) many bottles of Teva Product sold by Teva to wholesalers are still moving through the marketplace. Therefore, the Court will treat condition [ii] as being satisfied, presenting another basis for a finding of no likelihood of success on the merits.
Court next analyzed other factors such as Irreparable Harm, Balance of Equities & Public Interest , some of which were found in favor of Amgen. But finally court held that Amgen has not met its burden to show a likelihood of success on its claim that Cipla breached the Amgen-Cipla Agreement by selling Cipla Product. Thus, Court denied Amgen’s motion for a preliminary injunction.

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