Federal Circuit Finds No Biosimilars Application Means No Case or Controversy for Sandoz

In Sandoz Inc. v. Amgen Inc., the Federal Circuit upheld the district court decision dismissing Sandoz’s declaratory judgment action for lack of jurisdiction. Although this may be the first Federal Circuit decision relating to a possible “biosimilar” product, the court was careful to steer clear of the biosimilars statute. Apparently the judges aren’t the only ones trying to avoid the patent provisions of the Biologics Price Competition and Innovation Act.

The Patents at Issue

The patents at issue are U.S. Patent Nos. 8,063,182 and 8,163,522, issued to Hoffman-LaRoche (also a named defendant) and exclusively licensed to Amgen. The patents relate to human tumor necrosis factor (TNF)-binding proteins, and are said to cover Amgen’s Enbrel® (etanercept) product. As described in the prescribing information, Enbrel® (etanercept) is a fusion protein of the extracellular ligand-binding portion of the human TNF receptor linked to the Fc portion of human IgG1.

The Biosimilars Framework

Enbrel® (etanercept) was approved as a “biological product” under 42 USC § 262(i) for the treatment of rheumatoid arthritis. Sandoz is developing its own etanercept product for which it plans to seek approval under the “biosimilars” provisions of the Biologics Price Competition and Innovation Act of 2009 (BPCIA). Important to this decision, Sandoz had not filed a biosimilars application with the FDA when it brought this declaratory judgment action. Thus, while the BCPIA includes a statutory framework for resolving patent disputes between a biosimilar applicant and reference product sponsor, this case was not brought under that statute, 42 USC § 262(l).

The Declaratory Judgment Action

According to the Federal Circuit decision, Sandoz filed its complaint on the same day that it began a Phase III clinical trial of its etanercept product. Amgen moved to dismiss the complaint, asserting that the court lacked jurisdiction because there was “no immediate, real controversy between the parties yet.”

The district court (N.D. Cal.) granted the motion to dismiss, agreeing with Amgen and also interpreting the BPCIA as prohibiting Sandoz’s suit. In particular, “[t]he court reasoned that, because Sandoz planned to enter the market by the biosimilarity route, it had to follow the BPCIA’s patent-related procedures … which it had not done.”

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Taranto and joined by Judges Dyk and Chen.

The Federal Circuit focused on the “immediacy” aspect of the “case or controversy” requirement for declaratory judgment jurisdiction under 28 USC § 2201, citing the Supreme Court’s 2007 decision in MedImmune, Inc. v. Genentech, Inc.:

To answer the underlying case-or-controversy question in this context, we ask “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

The Federal Circuit explained:

An event that is several years in the future may be an appropriate subject for a declaratory judgment. The immediacy requirement is concerned with whether there is an immediate impact on the plaintiff and whether the lapse of time creates uncertainty.

The Federal Circuit emphasized that there is no “bright-line test,” but rather “all the circumstances” must be considered, including “related questions of timing and contingency regarding the existence and content of any needed patent adjudication, as well as current concrete harms to the declaratory-judgment plaintiff from delaying an adjudication.”

On the “particular facts” before it, the Federal Circuit found no case or controversy:

Amgen has not suggested that anything Sandoz is currently doing exposes it to infringement liability, and there is no dispute that Sandoz cannot engage in the only liability-exposing conduct at issue without FDA approval of an application precisely defining the products it may market. Sandoz has not even filed such an application.

Overall, the Federal Circuit noted too many contingencies—the possibility that the Phase III trial would not go well, the possibility that Sandoz would modify its product, the possibility that Sandoz would decide not to proceed—that could “change or eliminate” the patent dispute.

Although not adopting “a categorical rule,” the court noted that “[i]n the pre-application context presented here, we conclude that the events exposing Sandoz to infringement liability ‘may not occur as anticipated, or indeed may not occur at all,’” such that there was no declaratory judgment jurisdiction.

Steering Clear of the BPCIA

In rendering its decision, the Federal Circuit made clear that it was not deciding whether Sandoz was obligated to avail itself of the patent dispute provisions of the BCPIA:

Our resolution of this case makes it unnecessary for us to address the district court’s BPCIA rationale. We also do not decide whether, once an application is filed under the BPCIA, that statute forecloses a declaratory judgment action concerning whether the ultimate marketing of the application-defined product would infringe under 35 USC § 271(a).

While several companies are interested in obtaining approval of the first biosimilar product, it appears that no one wants to be involved in the first biosimilars litigation. The first accepted biosimilars application was filed by Sandoz for approval of a biosimilar version of Amgen’s Neupogen® (filgrastim) product, but Sandoz did not follow the procedures of § 262(l). (As a result, Amgen has brought suit against Sandoz alleging unfair competition, conversion, and patent infringement.) Celltrion Health Care Co. and Hospira, Inc. are developing biosimilar versions of Remicade® (infliximab), but sought to invalidate related patents in declaratory judgment actions instead of via the BCPIA.  On December 1, 2014, the district court judge (S.D.N.Y.) dismissed the cases for lacking a justiciable controversy (“Celltrion is simply too far from receiving FDA approval of Remsima for the exercise of declaratory judgment jurisdiction to be proper.”) and being outside the BCPIA (Celltrion’s attempts to skirt the BPCIA’s dispute resolution mechanisms while reaping the benefits of its approval process is improper.”) Nevertheless, with biosimilar products advancing towards approval, it should only be a matter of time before the first § 262(l) complaint is filed.