Ever since the Supreme Court struck down Myriad Genetics' patent claims on isolated BRCA1 and BRCA2 gene sequences, industry observers have breathlessly speculated whether the company would take legal action against labs challenging its decades-long reign over the BRCA genetic testing market.
Myriad made its move this week. Along with several other assignees to a handful of US patents underlying the BRACAnalysis test, Myriad filed a patent infringement lawsuit against Ambry Genetics and Gene by Gene.
In a complaint filed with the US District Court for the District of Utah, the plaintiffs allege that Ambry's testing process for gauging mutations in BRCA1 and BRCA2 genes infringe a number of claims in 10 patents: 5,709,999; 5,747,282; 5,753,441; 5,837,492; 6,033,857; 5,645,155; 5,750,400; 6,051,379; 6,951,721; 7,250,497. In the suit against Gene by Gene, filed in the same court, the plaintiffs allege the company's test processes infringe claims in nine of the same patents (not including patent number 6,051,379).
The other patent holders bringing the lawsuit against Ambry and Gene by Gene include the University of Utah, University of Pennsylvania, the Hospital for Sick Children, and Endorecherche. The plaintiffs are asking the court to issue a preliminary injunction halting Ambry from providing genetic tests that involve IP at issue in the case, and claim that four of Ambry's tests — BRCAplus, BreastNext, OvaNext, and CancerNext — are applying a diagnostic process protected by their patents.
Additionally, the plaintiffs are seeking up to treble damages for any profits lost if the court finds that Ambry's infringement is willful. The patent holders are asking the court for similar relief in the case against Gene by Gene.
BRACAnalysis, which gauges alterations in BRCA1 and BRCA2 genes linked to increased risk of hereditary breast and ovarian cancer, accounts for more than 80 percent of Myriad's revenues. In fiscal year 2012, the test brought in more than $400 million in revenues, a 15 percent increase from the previous year.
The company said in its complaint that it has invested more than $500 million since the early 1990s to develop and continue to improve the BRACAnalysis test.
To the other patent holders in the case, "each year Myriad returns a percent of its profits … in the form of royalties for licenses to their BRCA patents," Myriad spokesperson Ron Rogers told PGx Reporter. "Over the life of the patents, Myriad has paid [these patent owners] $57 million."
In a statement, Ambry said it plans to vigorously defend itself against the patent infringement lawsuit. "We have had an overwhelming response from our clients seeking an alternative laboratory to perform BRCA testing and Ambry is fully committed to supporting our clients and patients moving forward," said CEO Charles Dunlop.
Gene by Gene declined to comment on the lawsuit noting it has not yet received a complaint.
Myriad moved quickly to assert its patent rights over its flagship BRACAnalysis after the Supreme Court ruled in mid-June that several of its claims on isolated BRCA sequences are products of nature and thus invalid under US patent law. However, in Association for Molecular Pathology et al v Myriad the court upheld several of Myriad's claims on complementary DNA synthesized in a lab and used as probes and primers in diagnostic testing.
"Patent holders who don't enforce their patents at all, or who wait too long when they know the patent is being infringed, can be deemed to have waived their rights," Dan Burk, a law professor at the University of California,Irvine, and an expert in biotechnology and patent law, told PGx Reporter. "So, a patent holder has to take some action to maintain the patent."
Many labs, including Ambry and Gene by Gene, interpreted the Supreme Court's two-part ruling in AMP v. Myriad as giving them room to launch competing BRCA tests on the market. Most lab directors PGx Reporter spoke to at the time didn't feel impeded by the fact that Myriad's cDNA claims were upheld by the Supreme Court, reasoning that cDNA is easy to work around and not a hindrance to providing diagnostic testing (PGx Reporter 6/19/2013).
Meanwhile, Myriad has stayed consistent with the message that it still has 500 valid and enforceable claims in 24 patents underlying its BRACAnalysis test. The Supreme Court had similarly emphasized in its ruling in AMP v. Myriad that the company still had valid patent claims that describe novel applications of the knowledge about the association between BRCA alterations and cancer risk.
If the district court in Utah takes up the lawsuits against Ambry and Gene by Gene, then it will likely play out in the course of these cases whether the at-issue patent claims hold up against another Supreme Court ruling, Mayo v. Prometheus. In that case, the court struck down Prometheus' patent claims on methods of determining metabolite levels in the body to dose thiopurine drugs for stomach disorders. In the ruling, the Supreme Court emphasized that "an application of a law of nature … to a known structure or process may [deserve] patent protection," but in order to transform a law of nature into something worthy of a patent, the applicant "must do more than simply state the law of nature while adding the words 'apply it'” (PGx Reporter 3/21/2012).
Kevin Noonan, biotech patent lawyer for McDonnell Boehnen Hulbert & Berghoff, recently warned in the Patent Docs blog that Myriad does hold patent claims that do more than apply a law of nature, such as claim 4 of patent number 6,033,857. In his view, claims such as this one would still be valid under re-examination in the post-Mayo and Myriad environment. "The court's Myriad decision not only does not preclude patent-eligibility for these claims, it affirmatively suggests that claims to such applications (particularly when directed to using cDNA) are the type of claims the court believes do not suffer from the deficiencies the court found attached to claims to 'merely' isolated genomic DNA," Noonan wrote in the blog post.
Indeed, claim 4 of the '857 patent is one of those that Myriad and the other plaintiffs allege Ambry and Gene by Gene are infringing. The claim describes a "method of diagnosing a predisposition for breast cancer … determined by an assay … consisting of observing shifts in eletrophoretic mobility of single-stranded DNA on non-denaturing polyacrylamide gels." The claim also describes, for example, "amplifying all or part of the BRCA2 gene" from a patient's sample "using primers for a specific BRCA2 mutant allele."
Ambry's various tests gauge the BRCA gene sequence and assess deletions and duplications using Illumina's next-generation sequencing platforms, the HiSeq or the MiSeq. Gene by Gene subsidiary DNA Traits is conducting BRCA testing on a Sanger sequencing-based platform.
The extent to which Ambry and Gene by Gene's processes use the methods described in these patents in the lawsuit is unclear. Experts in the diagnostics field generally agree that cDNA is not necessary to detect a mutation, since many disease-linked mutations are detectable by analyzing the genomic DNA sequence directly.
Strategy of deterrence
Ambry and Gene by Gene aren't the only labs that decided to offer BRCA testing commercially after the Supreme Court's ruling in AMP v. Myriad, which raises the question as to why Myriad chose to sue these particular labs.
"We picked [Ambry] because they're testing process is infringing the patent claims of all the patent owners," Myriad's Rogers told PGx Reporter without elaborating. Myriad's General Counsel Richard Marsh would not speculate on whether the company plans to take action against other labs offering BRCA testing.
In addition to Ambry and Gene by Gene, Emory Genetics Lab, GeneDx, Pathway Genomics, Ethigen, and the University of Washington announced they would offer BRCA testing after the Supreme Court's ruling in AMP v. Myriad. Quest Diagnostics has also expressed an interest in providing BRCA testing later this year. It's difficult to gauge the extent to which these labs are facing similar litigation risk.
"A patent holder doesn't have to enforce the patent against all infringers at once. The patent holder can decide who to sue first, and in what order defendants should be sued," Burk said. "Generally the order chosen depends on a combination of business and litigation strategy: what lawsuits the patent holder thinks are most likely to be successful, what suits will deter other potential infringers, what suits will send a signal to investors or to the market.
"It is very common to choose a defendant against whom you can quickly obtain a court order, and then use that success to convince other potential defendants to take a license or to cease their activity," he added. "Presumably, Myriad and the other plaintiffs took all this into account in deciding to begin with Ambry."
Ambry has been publicly enthusiastic about starting up its BRCA testing business in the US immediately after the Supreme Court decision in AMP v. Myriad. As reported by PGx Reporter sister publication Clinical Sequencing News, as of the end of June, Ambry had begun accepting samples for BRCA testing and had planned to return the first results to healthcare providers fairly soon. "Right now, we're being flooded with samples," Ardy Arianpour, senior VP of business development at Ambry, recently said (CSN 6/26/2013).
Gene by Gene's DNA Traits also began offering BRCA testing immediately after the Supreme Court ruling. The company has been offering BRCA testing internationally for more than a year.
Ethigen is currently offering BRCA testing using next-generation sequencing through a UK-based academic lab. Eric Dyer, a former Myriad employee, founded the company in 2012 and based it in Salt Lake City, where Myriad is also located.
"We're currently reviewing the claims in the suit to determine what, if any, validity they may have with regard to modern sequencing approaches and any implications to our own operation," Dyer told PGx Reporter.
Meanwhile, the Emory Genetics Lab, GeneDx, Pathway, and Quest planned to launch testing later this summer or in the fall. It is unclear whether these labs will continue with their plans to offer BRCA testing while this lawsuit progresses, or if this case will give competitors pause, allowing Myriad to continue to be the only provider of BRCA testing. Several labs providing BRCA testing did not comment for this article.
"Often the real goal in these suits is to get a preliminary injunction, which can happen very quickly and very early," Burk said. "That alone sometimes puts the alleged infringer out of business, or induces them to negotiate for a license."
Daniel Ravicher, executive director of the Public Patent Foundation, accused Myriad of bluffing and asserted that the company was trying to bolster its stock. The day after the Supreme Court issued its decision with regard to Myriad's patent claims, the company's stock price dropped 14 percent.
"I don't think this case will cause a chilling effect, because Myriad will lose just as it lost in AMP v. Myriad," Ravicher said. "This, to me, is a bluff meant to appease Wall Street and keep up the appearance as though they have a moat around their business, when they do not." PUBPAT, a non-profit legal services organization, and the American Civil Liberties Union represented plaintiffs -- healthcare providers, researchers, and patients -- in challenging Myriad's patent claims in AMP v. Myriad.
Wall Street analyst Vamil Divan at Credit Suisse believes that companies offering BRCA testing were likely expecting and ready for some kind of litigation from Myriad. As such, the suit against Ambry may not scare off these players from continuing to offer their tests.
"Any labs that have already announced that they would be entering or that are thinking about it must have assumed that Myriad would sue. I don’t think this would be a surprise to any of them, so I don’t think it will impact their plans," Divan said. "There may be some labs that may have already decided that they don’t want to enter because it would be a risk to do so, but I don’t think Myriad actually going ahead and suing Ambry would change their thinking in any way."
Protecting future products
After filing the suits and serving Ambry and Gene by Gene with the complaints, the defendants will have a chance to respond. The court then will consider Myriad and other patent holders' motion for a preliminary injunction to stop the labs from performing BRCA testing, and the parties will meet with the judge to set a date for the trial. "That's pretty far down the road at this point," Myriad's Marsh said.
As these cases unfold, several of Myriad's key patents underlying BRACAnalysis are slated to expire in two years. "Although some of the patents will expire in 2015, two years worth of exclusivity, or royalties, or damages can be very valuable," Burk pointed out.
It is worth noting that in the next 24 months, Myriad's product pipeline is expected to undergo a complete transformation. Myriad is planning to retire BRACAnalysis and phase out its other hereditary cancer tests by the summer of 2015.
In place of these tests, Myriad will launch a 25-gene, next-generation sequencing-based hereditary cancer panel, called myRisk Hereditary Cancer. Slated for launch by the end of the year, the myRisk test will gauge many of the hereditary risk markers currently assessed by Myriad's existing tests.
Myriad's patent position on key markers included in the myRisk test will likely be a critical part of its strategy to differentiate its test from other labs marketing NGS cancer panels. During a call to announce first-quarter 2013 financial results, Myriad CEO Peter Meldrum highlighted that the company has "strong method of use patent protection around many of the key genes that may be important in any pan-cancer panel." Specifically, he noted that Myriad holds intellectual property around eight genes that will be included in the panel: BRCA1, BRCA2, BART, RAD51C, PALB2, PTEN, MYH, and P16.
"I think this lawsuit is … about protecting the BRCA testing franchise, with focus much more on their panels, as opposed to strictly trying to maintain sales of BRACAnalysis," Credit Suisse's Divan said.
Pledge to patients
In filing the lawsuits against Ambry and Gene by Gene, Myriad simultaneously issued a pledge to patients, promising to not impede non-commercial, academic research that uses its patented technology; not interfere with labs conducting genetic testing to provide a second opinion result or confirm test results provided by Myriad; and to continue to provide financial assistance and free testing to patients with a financial need.
In AMP v. Myriad, healthcare providers, researchers, and patients challenging Myriad's patents had alleged that the company was exercising its patents to thwart patient access to affordable testing and to hinder research.
For example, Harry Ostrer, a genetics researcher formerly at New York University and a plaintiff found to have standing in AMP v. Myriad, has said that although he is conducting BRCA gene sequencing in a research setting, Myriad's patent position restricts them from informing study participants of test results. If clinical investigators were to report the diagnostic results from BRCA tests to study subjects, then it would cease to be research in Myriad's view and the firm would seek payment for each "testing service," the company informed Ostrer in a licensing letter several years ago.
Myriad's Rogers countered that during the course of this case the company has been unfairly represented with regard to how it treats patients and researchers, adding that the allegations that the company stops second-opinion or research testing "couldn't be further from the truth" (PGx Reporter 8/22/2012).
BRACAnalysis currently costs around $4,000. More than 35,000 patients at risk for hereditary breast and ovarian cancer have received assistance from Myriad to help pay for BRACAnalysis testing, according to Rogers. Additionally, Myriad has maintained that it hasn't enforced its patent rights to restrict research, highlighting that 9,000 papers have been published by 18,000 authors on BRCA 1/2 mutations.