Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc.

by Robins Kaplan LLP

Case Name: Bristol-Myers Squibb Co. v. Teva Pharms. USA, Inc., 752 F.3d 967 (Fed. Cir. June 12, 2014) (Circuit Judges Prost, Plager, and Chen presiding; Opinion by Chen, J.) (Appeal from D. Del., Burke, M.J.)

Drug Product and Patent(s)-in-Suit: Baraclude® (entecavir); U.S. Pat. No. 5,206,244 (“the ’244 patent”)

Nature of the Case and Issue(s) Presented: BMS owns the ’244 patent, which covers a nucleoside analogue composed of two regions: a carbocyclic ring and a guanine base. Nucleoside analogues are known to mimic the activity of naturally occurring nucleosides, and typically serve as effective antiviral compounds. Claim 8 of the ’244 patent covers a nucleoside analogue known as entecavir. Entecavir has been shown to be especially effective in treating hepatitis B, and is marketed and sold by BMS as Baraclude. Teva filed its ANDA for a generic version of Baraclude. Its ANDA submission contained a Paragraph IV certification alleging that its ANDA product would not infringe the ’244 patent, and/or that the ’244 patent was invalid or unenforceable. BMS filed suit. Prior to trial, the parties narrowed the issues to obviousness and inequitable conduct. After a bench trial, the district court found that Teva had failed to establish inequitable conduct, but that claim 8 of the ’244 patent was invalid due to obviousness. BMS appealed, and the Federal Circuit affirmed.

Why Teva Prevailed:  The district court decided to focus on a compound known as 2’-CDG as a lead compound in the prior art. 2’-CDG was structurally similar to entecavir, and was shown to exhibit anti-viral activity in vivo as well as a high potency in comparison to other leading drugs on the market. BMS did not disclose this compound to the examiner during prosecution. BMS did, however, submit prior art known as Madhavan compound 30 during prosecution, which also shared structural similarities to entecavir, as well as the same pharmaceutical indication. The district court concluded that based on the structural similarity between 2’-CDG and entecavir, the teachings of the Madhavan reference, the finding that the exocyclic methylene substitution would be a “small, conservative change[]” and the “totality of the prior art” on 2’-CDG, a skilled artisan would have been motivated to substitute an exocyclic methylene group at the 5’ position of 2’-CDG. In reviewing the district court’s finding, the Federal Circuit noted that in order to establish obviousness in cases involving new chemical compounds, the accused infringer must identify some reason that would have led a chemist to modify a known compound. Such a modification usually focuses on the identity of a “lead compound.” The Federal Circuit first considered the appellant’s argument that a skilled artisan would have had to make too many decisions to arrive at entecavir when starting with 2’-CDG as a lead compound. The six decisions identified by BMS included: (i) the class of nucleoside-analogue compounds; (ii) 2'-CDG as a lead compound from the class of carbocyclics; (iii) the carbocyclic ring or guanine base of 2'-CDG for modification; (iv) the 2’ or 5’ position on the carbocyclic ring; (v) the specific chemical element on the 5’ position (carbon); and (vi) the type of carbon to carbon bond (single or double). The Federal Circuit concluded that the district court’s analysis is well supported.

The Federal Circuit disagreed with BMS’s argument that 2’-CDG would not have been an obvious lead compound at the time of invention because it was shown to be toxic in the 1990’s. However, at the time of invention, the compound was generally understood to be non-toxic, and other researchers were already using it as a lead compound. After selecting 2’-CDG as a lead compound, there was general agreement that a chemist in drug development would seek to make small conservative changes to that structure.

The Federal Circuit found ample evidence in the record that one of ordinary skill would be motivated to modify 2’-CDG’s carbocyclic ring by substituting an exocyclic methylene group at the 5’ prime position in order to arrive at the structure of the patented compound. This, the Federal Circuit concluded, was a natural decision because the goal was to develop antivirals with improved activity. The Federal Circuit also cited unrefuted testimony that the 2’ and 5’ position on the carbocyclic ring were attractive targets for modification because small changes could easily be made at those sites. The Federal Circuit concluded that the district court properly decided that the modification required to transform 2’-CDG into entecavir was minor and obvious. The Federal Circuit also rejected the BMS’s argument that a new chemical entity, as a matter of law, could not be obvious when the claimed invention possessed unexpected properties. It noted that the claimed compound demonstrated both expected, and additional unexpected properties. However, the additional unexpected properties did not upset an already established motivation to modify a prior-art compound based on the expected properties of the resulting compound. The Federal Circuit stated that a contrary per se rule was unfounded.

Next, the Federal Circuit considered the district court’s conclusions regarding secondary considerations of non-obviousness. With respect to unexpected properties, BMS relied upon three contentions: (i) high potency against hepatitis B; (ii) a larger-than-expected therapeutic window; and (iii) a high genetic barrier to resistance. The district court found that the anti-viral activity of entecavir was not unexpected because 2’-CDG was shown to be effective against hepatitis B. 2’-CDG was also known to have a good therapeutic window. The district court concluded that while the degree of entecavir’s effectiveness was unexpected, its effectiveness against hepatitis B was not unexpected, in light of the structurally similar 2’-CDG. The Federal Circuit also agreed, but determined that the district court committed two legal errors with respect to its analysis of unexpected results. These errors were harmless, and the district court ultimately arrived at the proper conclusion. With regard to commercial success, the district court concluded that BMS established that its drug did achieve some degree of commercial success based on sales and market share, but that it was less dynamic than BMS had represented. The Federal Circuit specifically identified evidence that two competitors were able to gain market share more rapidly than BMS, and that internal BMS documents described Baraclude’s market performance as “sub optimal.” The Federal Circuit also determined that BMS’s evidence of long-felt need was not persuasive due to the fact that three other drugs designed to treat hepatitis B were invented before the filing date for entecavir, and that the inventors of entecavir did not even become aware that it was an effective treatment against hepatitis B until four years after the patent was filed.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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