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SUNY, NYU, Galderma Sue Generics Firm Mylan for Allegedly Infringing Rosacea Rx IP

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The State University of New York, dermatology company Galderma, and New York University last week sued generic drug manufacturer Mylan Pharmaceuticals for allegedly infringing four patents related to Oracea, Galderma's orally administered treatment for rosacea.

Although SUNY and NYU's financial stake in the proceedings is unclear, they are seeking to protect a royalty stream that dates back to a 1992 licensing agreement with Galderma predecessor Collagenix Pharmaceuticals for some of the patents protecting Oracea, which exceeded $50 million in sales in 2007.

The suit, filed last week in the US District Court for the District of Delaware, centers on US Patent Nos. 5,789,395 and 5,919,775, which are jointly issued to SUNY and NYU's Hospital for Joint Diseases and licensed exclusively to Collagenex; and US Patent Nos. 7,211,267 and 7,232,572, which are assigned to Collagenex.

Galderma, itself a subsidiary of consumer personal care giant L'Oreal, agreed to acquire Collagenex in February 2008 for $420 million and thus assume possession of both the licensing agreement and Collagenex patents.

The SUNY/NYU patents both cover methods of inhibiting nitric oxide with tetracycline compounds, while the Collagenex patents cover methods for treating acne and rosacea by using low concentrations of tetracycline compounds.

According to a March 2007 SEC filing by Collagenix, its last before being acquired by Galderma, the patents are part of an estate protecting a technology called Inhibitors of Multiple Proteases and Cytokines, or IMPACS. The IMPACS technology forms the basis of Galderma's Oracea, an oral formulation of doxycycline and the only FDA-approved therapy for treating inflammatory lesions associated with rosacea.

The suit alleges that Mylan Pharmaceuticals, a business unit of Mylan Laboratories, recently filed an abbreviated new drug application with the US Food and Drug Administration for a generic doxycycline delayed-release capsule.

Though the date of the filing is not clear, the plaintiffs received notification of Mylan's ANDA on or about Feb. 4 of this year, and said that Mylan claimed in its ANDA that specific claims of the four patents were invalid and would not be infringed by manufacture or sale of the generic product.

Consequently, SUNY, NYU, and Galderma filed their suit, claiming that Mylan's ANDA filing and allegations within that filing constituted infringement of the patents; and that they would be irreparably harmed if Mylan were allowed to manufacture or sell the generic product. Moreover, the plaintiffs alleged in their complaint that Mylan's actions are "an exceptional case … because Mylan was aware of the existence of the [patents] at the time of the submission of [the] ANDA."

Calls to Mylan seeking comment on the allegations were not returned.

The plaintiffs are seeking judgment from the court that the effective date of any approval of Mylan's ANDA not be earlier than the expiration dates of the patents, including any extensions; and that Mylan be "preliminarily and permanently enjoined from commercially manufacturing, using, offering to sell, selling, or importing any generic products prior to the expiration dates."

The oldest of the four patents, No. '395, was filed on Aug. 30, 1996, and thus would be set to expire on Aug. 30, 2016; while the youngest, No. '267, was filed on Feb. 18, 2005, and thus would expire on Feb. 18, 2025, barring any extensions.

It is unclear what stake SUNY and NYU have in Galderma's Oracea. According to the 2008 Collagenex SEC filing, it entered into a license agreement with SUNY in January 1992 for certain patents and patent applications related to IMPACS and Oracea, and has subsequently amended that agreement twice.

SUNY is presumably the lead institution on licensing the joint SUNY/NYU patents as it is the only institution mentioned in the Collagenix SEC filing. If this is this case, it would likely have a pre-existing agreement with NYU as to how royalties from Oracea are shared.

According to the regulatory filing, the license gave Collagenex an exclusive worldwide license to make and sell products employing tetracyclines (of which doxycycline is one) that are designed or used to alter a biological process.

In exchange for these rights, Collagenex issued SUNY nearly 80,000 shares of its common stock in 1992; and agreed to pay SUNY royalties on net sales of licensed products, with minimum annual royalty payments of $50,000 per year. The license also stipulated that Collagenex was entitled to deduct any costs incurred while defending the SUNY patents from its royalty stream.

It is unclear whether the licensing agreement has since been amended due to Galderma's acquisition of Collagenex. It is also unclear what SUNY's exact royalty rate is for Oracea.

However, SUNY's annual royalty payments likely exceed the $50,000 minimum: according to Collagenex's 2007 financial results, released in March of last year just before the Galderma acquisition closed, Oracea had $52.5 million in net sales in 2007. Using a conservative royalty rate of 5 percent would correspond to a 2007 royalty payment of about $2.6 million.

A SUNY spokesperson declined to comment on its stake in the proceedings, citing a policy of not commenting on ongoing litigation.

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