Here’s a little business drama to go with your morning coffee.
Remember Regeneron Pharmaceuticals, developer of drugs to treat eye diseases, allergic and inflammatory conditions, cancer, heart issues, and blood disorders?
Headquartered in Westchester County, but with ever-growing manufacturing and fulfillment operations in Rensselaer County, the company made headlines in 2020 for treating then-President Donald Trump’s COVID-19 infection with a “cocktail” of specially engineered antibodies.
Among its more commercialized products, though, is Eylea, a treatment for age- and diabetes-related eye problems that rang up nearly $6 billion in U.S. sales last year, a significant chunk of worldwide revenue.
Behind the scenes, however, is a courthouse tiff that tilted toward Regeneron last week as a federal appeals court revived antitrust claims it brought against Swiss drug giant Novartis Pharma.
Eylea and Lucentis, a similar drug that Genentech markets in the U.S. and Novartis does elsewhere, are injected by needle directly into a patient’s eye. In the past, that was done in a two-step process that used one needle to extract the drug from a vial and then switched to an injection needle to administer.
Recently, delivery by pre-filled syringe has become popular, requiring no needle switch, which is easier and reduces the risk of inadvertent infection.
But here’s the rub: Regeneron alleged in a lawsuit a few years back that it was duped by a German company, Vetter Pharma International, on a collaborative deal to develop a pre-filled syringe for delivering Eylea – only to have Vetter offer the same to Novartis for Lucentis. (Vetter had been providing vial-filling services for both companies, according to court records.)
What’s more, Regeneron claimed, Novartis and Vetter concealed the latter’s contribution to a patent Novartis obtained in 2015 for the pre-filled version of Lucentis, which should have disqualified them from patenting it, and then sued Regeneron for infringing the patent upon release of Eylea pre-filled syringes in 2019. That, in turn, led Regeneron to sue Novartis and Vetter for allegedly violating antitrust laws by trying to keep the market all to themselves.
Confused yet?
A judge for the U.S. District Court that serves the Capital Region ruled against Regeneron’s antitrust claims two years ago. Last week in Manhattan, however, the Second Circuit U.S. Court of Appeals reversed, breathing new life into the allegations.
The crux of the appeals court’s 37-page decision was that Regeneron made a case that the relevant product market for its antitrust claims should be limited just to pre-filled syringes, not vials too.
The court said Regeneron plausibly argued that pre-filled syringes “compete in a wholly separate market from vials,” as demonstrated by the rate of conversion of patients and doctors from vials to syringes as soon as they became available – 80% or more. That the conversion would be unaffected even if syringe treatment were more expensive was another factor favoring a distinct market, according to the court.
The decision sends the case back to the U.S. District Court for reconsideration.