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Amgen prevails in high-stakes drug case against Novartis

Amgen said Wednesday that a federal appeals court upheld two patents protecting its blockbuster inflammatory disease drug Enbrel, marking the latest legal setback for rival Sandoz, a Novartis company that develops copycat medicines.

For years, Sandoz has tried to bring a biosimilar version of Enbrel to market. Its version, known as Erelzi, was one of the earliest biosimilars to gain approval in the U.S., securing clearance in 2016 to treat the same diseases as Enbrel, including rheumatoid arthritis, psoriatic arthritis and plaque psoriasis.

Despite that approval, Sandoz hasn’t been able to break through the thicket of patents protecting Amgen’s drug. The companies have been in a years-long legal feud that started to go in Amgen’s favor last summer, when a federal district court rejected Sandoz’s bid to invalidate the two Enbrel patents.

Sandoz quickly appealed, leading to Wednesday’s decision from the U.S. Court of Appeals for the Federal District, which ruled for Amgen. With its patents affirmed, Amgen may now not face biosimilar competition to Enbrel until 2029, which would be more than three decades after the drug’s 1998 approval.

Sandoz said it’s evaluating potential next steps, including possibly taking the case to the Supreme Court.

If that happens, it wouldn’t be the first time the two companies battle in front of the nation’s highest court. In 2017, the Supreme Court unanimously sided with Sandoz in a case debating when biosimilar developers can begin to sell their drugs after receiving an FDA approval. The ruling made it so these developers don’t have to wait until receiving approval to provide the branded drugmakers a mandatory 180-day notice of their intention to commence marketing.

Wall Street analysts largely expected the appeals court decision to go Amgen’s way.

Though perhaps unsurprising, the ruling does seem to minimize a potential threat to Amgen and its investors. Enbrel continues to be the company’s largest product by sales, bringing in a little over $5.2 billion in 2019. For the past three years, Enbrel accounted for roughly a quarter of Amgen’s sales.

Christopher Raymond, an analyst at Piper Sandler, argues that Amgen’s latest success should prompt investors and rival drug companies to think twice before betting against Amgen and its intellectual property in a courtroom setting. He noted the California-based biotech has now come out victorious in several high-profile cases.

“As the saying goes, [Amgen] is really an IP litigation firm that just so happens to be in the business of developing drugs,” Raymond wrote in a note to clients Wednesday.

“Joking aside, we do think it’s worth stepping back and marveling at [the company’s] successes through the years with respect to defending its intellectual property, including this case,” he added, referring to the appeals court ruling.

Novartis, though, said it will continue trying to get Erelzi on the market. The company has pointed to estimates that indicate a biosimilar version of Enbrel could save the U.S. healthcare system about $1 billion per year.

“Our company respects valid intellectual property. However, Sandoz continues to believe the patents asserted by Amgen are not valid, and that it should not be able to use them to extend the drug’s exclusivity,” Carol Lynch, president of Sandoz U.S., said in a statement.

While Erelzi may be stalled for the time being, Enbrel isn’t without other competition.

The drug is part of several drug markets that, while already crowded, have become even more so in recent months. In rheumatoid arthritis, for instance, Enbrel goes up against the best-selling drug in the world, AbbVie’s Humira, as well as a newer class of therapies called JAK inhibitors. And in psoriasis, a new entrant from AbbVie is off to one of the strongest launches in recent memory.