Did Biota's announcement yesterday mean that they have been granted an extension of patent (and therefore royalties) over relenza, or not? Read it
As
previously reported on August 25, 2014, GlaxoSmithKline, plc (GSK)
filed an appeal to the United States Patent Trial and Appeal Board in
relation to the pending patent application No. 08/737,141 related to
Relenza
®
. On March 16, 2015, the company was informed that the United States
Patent Trial and Appeal Board had issued a decision denying the appeal
and affirming the Examiner’s prima facie case of obviousness rejection
under 35 U.S.C. 103(a). GSK and the company intend to pursue available
legal options with respect to this decision and to continue to seek
issuance of this pending patent. No assurance can be given that the
pursuit of any such options will be successful. Issued patents relating
to Relenza
®
outside of the Unite States are unaffected, and will expire in May 2015
in the major countries of the European Union, and July 2019 in Japan.
Trying to find a plain English translation somewhere.
It appears GSKs appeal against patent extension was denied. Why are both GSK and BOTA pursuing legal options?
Not sure why you misunderstand the announcement. It is quite unambiguous: the appeal against the prior rejection, by the US PTA, of Pat App 08/737,141, has been denied. Period. Thing is, a patent was never granted to GSK for Relenza. Biota wholly-owned all patents relating to Relenza. In December 2014, those patents expired in the US and will do so in the EU in a few weeks time. Seems there is some confusion. The fact is, GSK' s original application for a patent for Relenza was rejected in the early 1990's. The chemistry underlying Relenza was always solely owned by Biota. That's all the IP that ever was. GSK tried in teh early 90s for a patent on the Relenza formulation. It was denied. It appealed. It was denied. It appealed again (in Aug 2014). GSK has now appealed twice against the original US PTO rejection TWICE and has failed. There never was an extension of a patent for Relenza because there never was a patent on the Relenza formulation. The only patents granted were on the underlying chemisty of Relenza and these WERE owned entirely and exclusively by Biota. The real question is: why has Biota (US reborn) not seen fit to develop/acquire an alternative delivery device for Relenza (off-patent since 2014 in the US and v soon in Europe) and market/ manufacture directly to the US stockpiling agencies cutting-out the (GSK) middle-man? 7% royalty or 100% of sales? What's not to like? Go figure.
ReplyDeleteAddendum: it was always perplexing to some long-term Biota shareholders why Biota Holdings made a decision to support GSK's original appeal. What advantage was there for BTA? BTA held all the patnet cards - why would it support a patent application appeal that could only ever serve erode its ownership monopoly? Could it be that Biota Holdings entered into a foolish licensing deal with GSK which prevented BTA from pursuing Relenza independently of GSK post-patent expiry? Did it sign away its crown jewels? And if so, who benefited? Something doesn't add-up. Or perhaps I have over-looked something. That's the trouble with investing in opaque companies like Biota. Investors (at least the retails ones) never get to see the real picture. These days I still hold this stock perhaps i'm unwilling to admit the that I really bought a dog. It seemed like a company so full of unrealised potential lacking only an insight mgt with the balls to unlock it. I'm still waiting...
ReplyDeleteI think I'm the wrong guy to write this blog, Andrew. Thank you for your explanation which, if you don't mind me saying, hints at an even deeper knowledge of Biota.
ReplyDeleteBut, I'm a simple guy and still confused.
Can I trouble you for a followup?
1. Why would GSK appeal a patent that was about to expire?
2. It's Biota's own release that suggests a 17 year patient extension. Why is a patent extension for relenza a possibility?
3. Whats the "legal action" about?
4. A new delivery device (or an oral formulation) would mean a new set of trials, up to Phase 3. Right?
Your addendum questions are good ones. They deserve an answer. Given the number of ex-Biota employees in Australia, someone must know.
You don;t wait alone.
Regards
Michael
Michael, you will notice that my limited contribution to your blog comprises more questions and conjectures with caveats than answers. For what it's worth my conjectures to your questions:
ReplyDelete1. Biota's own written words are that it holds (held) all patents relating to Relenza. I think in one of the merger documents. Also search the history of the US patent application number. GSK appealed the original rejection decision some years ago which was denied and then tried again in 2014. And was as we now know denied again. It never held a patent on Relenza in the US at least. As such, as it now stands the use of 'patent-pending' is no longer valid (if it ever was). There is now no IP protection over Relenza in the US and v soon the same in the EU. The medicine can now be commercially pursued by any party (though perhaps with a new device). Why hasn't BOTA pursued this avenue?
2. I cant find the original press release (grateful if you would link). If they refereed to a 17 yr patent extension they must be using poetic license. First, there's no such thing as a 17 yr patent extension - in any country as far as i'm aware. The US can and do award extensions of several years - in the order of 6 or 7 years. Biota's own patents on zanamivir would already have been extended since (if memory serves) they were awarded in 1989/90 - 25 years ago as at Dec 2014.
3.No idea. I just hope this is not BOTA shareholders money. Enriching grubby lawyers in pursuing the US PTO on GSK's behalf after TWO failed appeals to the original application rejection 20 or so years ago sounds about as likely to succeed as BOTA hitting $100 per share. As you have astutely said on more than one occasion, cash is Biota's best friend, and we really can't afford to snub him as often as we do.
4. Bear in mind i'm no expert in these matters but I don't think it would mean that. Obviously, the drug achieved reg approval way back when. No need to do all that again for a new delivery device which would im sure require sufficient data to demonstrate successful delivery to human subjects at the required dosage in the correct formulation. I don't think greatly onerous though. Recall that a key plank in the BTA suit against GSK in 2005 was their (GSKs) failure to subsequently improve on its delivery device - viewed then as a key to Relenza's market failure (certainly a key problem for mass stockpiling). I can't imagine BTA would have raised this as a central point in its case against GSK were such an improvement to require starting the reg process from scratch. The case wld not have been taken seriously at any stage and it certainly was: recall GSK offered $75m + legal costs to settle before our great leaders settled for $20m incl. costs estimated around $40-50m (I still find myself shaking my head).
Neither would a new device require a new formulation. The Relenza powder is contained within a blister which is inserted into the current 'Diskhaler' device, which is then punctured, and the contents nhaled through a mouthpiece. A new device eg. similar to 'Twincaps' (Inavir) albeit wit capacity for 5x2 dosages for a full course, would negate the need for containment within a blister and use the free zanamivir powder directly. It's do-able.Could call it something snappy like 'Xanaduivir'! (the X in which is phonetically a Z of course!).
I echo your sentiments. Would dearly like to hear from someone with a better informed understanding particularly viz BTA-GSK Relenza licensing terms. Something doesn't add-up but maybe it's my math. Maybe not.
Perhaps other shareholders who have better correspondence with mgt would care to mail similar questions and report back. That would be great.
Keep up the good work Michael.
...further to above...just to be clear the only patents relating to Relenza (this is a trademark not a patent) held in the US were solely owned by Biota in respect of its patents on the zanamivir molecule. GSK submitted a patent application to the US for the Relenza formulation (the trademarked formulation comprising among other materials, zanamivir) in the early 1990s which was rejected. It appealed the decision in the early 2000s (with BTA support - why?) which was denied. It appealed again last year. The appeal was once again denied on the grounds of obviousness. This means, as i understand it, that the mere combination of prior art (ie. each of the constituents comprising the Relenza formulation) lacked novelty. It was an obvious step. That is, predictable by someone knowledgable in the art. Failure to satisfy novelty means rejection in the patent world. A search of the GSK patent no. on the US PTO will outline the timeline.
ReplyDeleteIf BOTA does not pursue a new device for the non-patent protected zanamivir formulation, it can be certain of one thing: no more royalties from Relenza sales. These will now accrue to GSK alone.
Legal action will prove futile and expensive. Why is BOTA doing this? They need to justify this? It is frankly insane and smacks of desperation. Perhaps it might even be challenged as being negligent by some party at some future date. Are we being managed by a ship of fools?
...and a bit more...I have previously wondered whether a possible reason for Biota's seeming hesitation in pursuing the development of a proprietary zanamivir delivery device for the US and EU, post-patent expiry, might be that it signed away its future rights to do so at the licensing stage. Surely, this couldn't be. Surely, such a licensing term, if it existed, would be construed as unconscionable if it ever came to a legal show-down with GSK. Imagine it, Biota, the only entity legally prevented from pursuing the commercialisation of an off-patent drug, which it (in collaboration with others of course) had discovered...
ReplyDeleteI would encourage any shareholder who reads this, large and small, to seeks answers from our illustrious mgt. I can see no other single development, as it now stands, that would do more to secure this company's fortunes than an improved, stockpiling-friendly, zanamivir-delivery system.
Biota's silence on this obvious strategy is deafening. So many questions. All starting with 'why'.
The link
ReplyDeletehttp://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001437749-14-017648.txt&FilePath=\2014\09\30\&CoName=BIOTA+PHARMACEUTICALS%2C+INC.&FormType=10-K&RcvdDate=9%2F30%2F2014&pdf=
On Page 14 it states:
pursuant to the terms of the Uruguay Round Agreements Act, patents filed on or after June 8, 1995 in the U. S. have a term of 20 years from the date of filing, regardless of the period of time it may take for the patent to ultimately issue. This may shorten the period of patent protection afforded to our products as patent applications in the biopharmaceutical sector often take considerable time to issue. Under the Drug Price Competition and Patent Term Restoration Act of 1984, a sponsor may obtain marketing exclusivity for a period of time following FDA approval of certain drug applications, regardless of patent status, if the drug is a new chemical entity or if new clinical studies were used to support the marketing application for the drug.
Zanamivir, a neuraminidase inhibitor approved for the treatment and prevention of influenza A and B, is marketed worldwide as Relenza ® by GSK. The Relenza ® patent portfolio, which is solely owned by us and exclusively licensed to GSK, is scheduled to expire as follows: December 2014 in the U.S., May 2015 in Australia, 2016 in the major countries of the EU, and July 2019 in Japan. However, GSK has verified that we will continue to receive royalties on the net sales of Relenza ® in the U.S. beyond December 2014 to the extent that U.S. Patent Application No. 08/737,141 remains pending. On August 25, 2014, GSK filed an appeal to the United States Patent Trial Appeal Board in relation to this pending patent application. While we cannot determine the duration or the outcome of this appeal process, or how long this patent application will remain pending, if the patent claims are ultimately issued, we expect that we would be eligible to receive royalties from net sales of Relenza ® in the U.S. for an additional 17 years from the date of allowance.
End quote
I think a new device would mean new trials.. from scratch.
That was the reason for the GSK law suit. If it had been easy to change the delivery device, then there would have been no reason to sue. GSK knew the device was flawed as well, so they would have pursued a switch. I believe it is not easy and requires new trials.
Further, if it were as easy as that, generic makers would have their generic relenza (in an inavir type inhaler) products ready to go. It's just that no-one wants to sell generic diskhalers. Especially when generic tamiflu is ready to compete.
But your overall point is correct. If BTA owns zanamavir it should be trying to produce a generic - if it has the right to do so. And if it doesn't that would be strange.
so, perhaps BTA is joined with GSK for an appeal against ITS (BIOTA'S) OWN PATENT in order to extend the royalty life of relenza according to its agreement with GSK.
ReplyDeleteWeird, but Is this correct??
Thanks for the link. IF BOTA keep referring to ¨patent pending¨ when it is no such thing they are setting themselves (ie. us) up for yet more legal expenses.
ReplyDeleteIf it is indeed the case that registering an improved inhalation device would entail the clinical reg process begin from scratch - then the whole sorry situation is easier to comprehend. Not least because it sounds like yet another example of regulation gone mad (or 'why the formerly free market west is rapidly morphing into the crony-capitalist-big-government-socialist-nightmare that it is').
You're point that generic co's would be in on it too if it were easy to go to market with a new device is taken. My response is better a share in a competitive market than no share at all in a monopoly.
The other thing to say of course is that Biota has had a long time (and an inside seat) to prepare for this entirely foreseeable event and should have been much better prepared (in lots of ways) than it is - such as building good relationships with BARDA and the FDA (for example).
Things don't look very promising. Future projected revenue already hit by the BARDA fiasco has now taken another major blow. What next?
A shame the zanamivir-GSK licensing terms did not define Biota's royalty time-frame to be the patent life of the delivery device integral to the drug's marketability. But that would have required negotiating nouse by those at the helm all those years ago, wouldn't it?
Amazing how it has come to this...
Just saw your comment at 04.25.
ReplyDeleteI don't see it like that. As I read it, Biota owned the patents relating to zanamivir (awarded in 1989/90). GSK applied for a patent on the Relenza formulation (the composite inhalable medicine) which was rejected on the grounds of obviousness. That is, not inventive and/or novel. GSK then appealed and lost the appeal. GSK appealed again (in 2014) and has now lost a second time.
Biota's claim that it held all patents relating to Relenza was therefore true - in that it solely owned the patents on zanamivir and since the Relenza formulation was not patent-protected. This was ok until the patents on zanamivir expired in 2014 in the US and soon in the EU. So now, neither the active ingredient (zanamivir) nor the inhaled zanamivir formulation (Relenza) are protected in key markets by patents.
Given our discussion re inhalation devices and registration requirements, GSK must not be overly concerned in that no one is going to spend the massive $$ necessary to put out a generic inhalable Relenza product.
This is my understand which might be flawed. I also have no idea what implications this may have (if it is accurate) for injectable Relenza which I understood GSK had in ph III trials (last I heard).
If you think my understanding is incorrect - i'm happy to be put right.
Injectable relenza - well, zanamavir is off patent, and GSK are doing the trials to register it. But will GSK pursue it if USPTO finds that the injectable version is not patentable too (prior art)? Because then anyone will make their own version after the trials. In any event Biota won't see any royalties from IV relenza.
ReplyDeleteThis was a double edged sword for Bota's value: extending relenza for 17 years would have been nice, although it necessarily would have eroded the value of LANI.
So the elephant in the room is the LANI ROW partnering. This is the only major near term opportunity for this company.
Elephants in rooms are downright dangerous, frankly. The problem is the lag between now and revenue from ROW LANI assuming of course ph III trials are successful and sufficient for reg approval. Will partnering happen in time for US/ROW trials next year? There has to be a reasonable lead time for approval to trial and then to prepare. IF they go ahead 2016, data will take another 12 months and approval... another 12-18 months??? Conservatively that's 2018 by my reckoning or 3+ years from now.
ReplyDeletePerhaps the legal recourse in combo with GSK re Relenza will keep alive Relenza royalties?? Lets hope so and let's also hope any royalties won't be simply offset (or worse) by the legal costs?
Biota shareholders are due some luck I feel.