Biotech Strategy Blog

Commentary on Science, Innovation & New Products with a focus on Oncology, Hematology & Cancer Immunotherapy

Posts from the ‘Intellectual Property’ category

Medivation investors hoping for a windfall will be disappointed to hear that on December 20, 2012 a California judge ruled the company had no rights to what is now known as Aragon Pharmaceuticals’ ARN-509, a next-generation androgen receptor (AR) antagonist for advanced prostate cancer, similar in chemical structure to enzalutamide (Xtandi).

Enzalutamide (formerly MDV3100) was developed in the UCLA laboratory of Drs. Charles Sawyers and Michael Jung and licensed by Medivation from the University of California. Medivation believed their licensing and sponsored research agreements gave them rights to any follow-on compounds. However, instead of giving Medivation first right of refusal, the University licensed what is now ARN-509 to Aragon Pharmaceuticals, a privately-held company whose owners include Sawyers and Jung.

You can read more about ARN-509 on Pharma Strategy Blog: “Is ARN-509 potentially better than MDV-3100?” Sally Church (@MaverickNY) also interviewed Dr Charles Sawyers in May 2011 just before Medivation commenced a lawsuit against the University of California, Sawyers and Jung claiming breach of contractual agreements.

Concern about the ownership of intellectual property rights to ARN-509 has overshadowed Aragon with many thinking Medivation had a strong case. This has likely hindered the ability to raise capital or obtain a potential partner, although Aragon did announce on October 4, 2012 they had raised $50M in series D financing. However, ARN-509 has been slow to move through development and has yet to enter phase 3 clinical trials.

Based on the limited public information available about the lawsuit between Medivation, University of California and Aragon, my thoughts last year were that the case would settle as none of the parties would want a trial that exposed sensitive intellectual property and financial information.

However, in a December 20, 2012 Order, Judge John E. Munter of the Superior Court of California granted summary judgment to The Regents of the University of California on a number of issues, finding that Medivation’s contracts with the University gave them no ownership or licensing rights to ARN-509.

Medivation v University of California IP dispute court docket

Many thanks to biotech investor (@lomu_j) for sharing the news on Twitter – definitely worth following if you do not do so already.

 

Based on the evidence submitted by the parties, Judge Munter decided that the University of California did not breach the Sponsored Research Agreement (SRA) with Medivation.

According to the court Order, the SRA provided that Medivation would have “a time-limited first right to negotiate an option or license, which may be exclusive” with respect to “Subject Inventions” that occurred during a specified performance period i.e. the University of California was required to disclose follow-on compounds such as ARN-509 to Medivation during this time.

However, anyone who has been involved in contractual disputes will know the devil is in the detail, and the court Order explains why Medivation did not prevail, as many had expected.

The SRA defined “Subject Invention” to be an invention that was “first conceived” and “actually reduced to practice” during the performance period which it was agreed would start on November 1, 2005. However, during discovery The Regents of the University of California presented evidence from a research scientist, Dr Samedy Ouk that A52, the compound that became ARN-509, was conceived and reduced to practice prior to this date. You can read more in the following excerpt from Judge Munter’s Order:

Superior Court of California Order excerpt MDVN Aragon ARN-509 dispute

Since the University was only obligated to disclose inventions after November 1, 2005, the court found they did not breach the SRA by failing to give Medivation the right to option or license a compound that was invented prior to this. A close call when you look at the dates, but that is what the parties agreed to in writing.

The court Order discusses several of the claims and disputes between the parties, some of which remain ongoing. It is of course possible that Medivation might appeal, but I was persuaded by Judge Munter’s cogent opinion. In essence the court ruling, unless it is overturned on appeal, means Aragon can move forward unhindered with the development of ARN-509.

Here’s my take from this case:

  1. When negotiating a contract, the devil is in the details. Good contract drafting should avoid the need for future litigation. Negotiating contracts can take months, but it’s never wise to sign anything just for the sake of expediency.
  2. A contractual dispute can occur years after an agreement was signed highlighting the importance of document retention, e.g. laboratory notebooks, especially where intellectual property is involved.
  3. Contracts typically have an integration clause that says what is written reflects the “entire understanding of the parties.” This means a court will only look to what is in written down and not what may have been said or verbally agreed prior to signing the agreement. It’s important to make sure the written contract is clear and unambiguous.
  4. IP litigation can delay a potential competitor and deter others from investing or partnering. By the time ARN-509 makes it to market, the prostate cancer landscape will be more competitive than it is today.  Through the delay Medivation ends up winning irrespective.
  5. Aragon may now be an attractive partner for companies with an established urology/prostate franchise who would like to compete against Medivation.

While many are excited about ARN-509 in advanced prostate cancer, it must be noted that Aragon have yet to show that ARN-509 is more effective than enzalutamide in patients. A phase 3 clinical trial of ARN-509 in the post-docetaxel prostate cancer setting will not be easy given it will most likely require comparison to the current standard of care (Xtandi or Zytiga) and not placebo.

The prostate cancer market remains a dynamic one with multiple new products in development and the potential for combination approaches. The forthcoming ASCO GU meeting in Orlando, from February 14-18, 2013 is worth watching for new updates.

Update May 29, 2013: Medivation announces they will appeal decision in favor of Aragon

According to the SEC filing that @ColfaxCapital kindly shared the link to last month on twitter, Medivation have not unsurprisingly announced they will appeal the California court decision in favor of Aragon.

The Medivation SEC 8-K filing notes that the appeal was filed on April 15, 2013 and will most likely take 12-18 months, so a California Court of Appeals decision is not expected until sometime in 2014.

There is also ongoing litigation between the University of California and Medivation over whether the company has to make royalty payments to the University when it receives commercial milestone payments from Astellas and a trial on this issue is scheduled for July 2013. Another trial over Medivation’s allegations of fraud against Dr Jung is set to start in October 2013.

There’s still plenty of legs left in this story and a time to go before we have a definitive outcome given that any trial decisions will most likely also be appealed in due course.

Update June 17, 2013: Johnson & Johnson announces acquisition of Aragon Pharmaceuticals with $650M upfront payment

J&J have this morning announced the acquisition of Aragon, and the rights to ARN-509 in a deal with a $650M upfront payment and contingent milestone payments of upto $350M.

Here’s a link to the press release published on the WSJ.

 

Today is the first “Innovation Day” at Children’s Hospital Boston. For those, like me, who can’t be in Boston for it, you can follow on Twitter using the hashtag #iday or watch online via live streaming.

Children's Hospital Boston Innovation Acceleration ProgramI’m impressed that the hospital has an Innovation Acceleration Program focused on supporting “clinical care that impacts patients around the world.

I think this event is a really great way to showcase some of the interesting research and collaboration that is taking place in the hospital in the field of device development, healthcare IT and process innovation.

The program starts at 1.00pm EST. On the Agenda are a few talks that caught my imagination:

Does my baby have a “flat head”? Using the web and digital photos to triage visits to the doctor’s office,  Joseph R. Madsen, MD

Pediatric Vision Scanner: A handheld device that diagnoses vision problems in preschoolers,  David Hunter, MD, PhD

New directions in drug delivery: A contact lens that dispenses medication, Dan Kohane, MD, PhD

The Children’s Hospital Boston science and innovation blog (Vector), which is well worth reading, also has a preview of their Innovation Day.

Given the ease and low cost with which events can be webcast or live streamed, and the potential to reach a global audience, I hope that other institutions will follow Children’s Hospital Boston and showcase their innovation in this way.

Good luck to all at Children’s with your first Innovation Day!

Richard Hsu (@hsutubeesq), a Silicon Vally technology lawyer and partner at King & Spalding has a new blog that I’d like to recommend.

Named “The One Page Blog”, it aims to showcase Richard’s knowledge of IP and technology law using one page posts. Most of the posts have a downloadable PDF with a useful framework or summary. A picture tells a thousand words.

I particularly like Richard’s recent post on how to analyze a confidentiality agreement. The model Richard proposes will be useful to lawyers who are not IP-experts or those who need to talk to their lawyers about some of the issues that should be considered.

The challenge I find with a non-disclosure or confidentiality agreement is always one of negotiating an agreement that is fair and reasonable to both parties. Typically the boilerplate I receive from biotechnology and pharmaceutical companies is far too much in their favor. Redlining and negotiation then follows!

Richard’s blog also has a 48 second video entitled “making my own magnetic rubik’s cube.” It is excellent and a standard I aspire to as I seek to do more video blog posts:

I look forward to more posts and video from the “The One Page Blog.”

BIO-2011-Interational-Convention-Washington-DC

I am excited to be attending, for the first time, the Biotechnology Industry Organization (BIO) international convention that takes place in Washington DC in just over a week’s time from Monday June 27 to Thursday, June 30th.

This meeting has something for everyone interested in the biotechnology industry whether it be deal making, partnering, licensing, drug discovery or personalized medicine. There are 16 specialized tracks where industry experts provide insight and best practices.

In addition, there are numerous networking and social events plus an exhibit hall that showcases the world’s biotech regions and how they are promoting innovation.

At meetings where there are parallel sessions, I apply “the law of two feet” (thanks to Podcamp for this) that says if you are not getting what you want from the session, it’s OK to walk out and go to another one.

My top 10 sessions at BIO reflect my personal interests in innovation, science and new product development:

Tuesday June 28

  • How will we afford Personalized Medicines?
  • The Biomarkers Consortium: Facilitating the Development and Qualification of Biological Markers
  • Personalized Oncology: The emergence of Personalized Medicine Strategies in Oncology Clinical Development and Deal Making
  • Navigating the New Law on Licensing Biosimilars

Wednesday June 29

  • Lessons from a Mature Public-Private Partnership. The Alzheimer’s Disease Neuroimaging Initiative
  • Emerging Markets. The Future of Growth for Biologics?
  • The Role of Imaging Biomarkers in Early Phase CNS Drug Development
  • The Promise of MicroRNA-based Therapeutics in Cancer

Thursday Jun 30

  • After the Fall. Venture Capital and the Biotech Funding Landscape
  • Regulatory Issues for Tissue Engineered Products

If you have plans to be at BIO 2011 do say hello after one of the sessions or receptions. You can reach me at the meeting via twitter (@3NT).  See you in DC!

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That is the interesting question that struck me after reading Sam Kean’s informative article in the February 4 edition of Science.  Ten years on from the sequencing of the Human Genome, the patenting of human genetic information presents unique challenges at the interface of science, law and innovation.

Researchers have obtained patents for isolating different sections of DNA that occur naturally in our bodies.  Whether this should be permitted is still open to debate. Currently, diagnostic companies who want to launch a new cancer test face the challenge that patents now cover many genes.

The Science article cites start-up Foundation Medicine in Cambridge, MA who estimated the cost of investigating possible patent infringement for a new diagnostic test at $35M, a cost that exceeded the company’s $25M of VC funding.

Add in the costs of any royalties or licensing fees and the issue of prior patents is now a nightmare for any diagnostics company.  It is simply not practical to license every gene that may be implicated in a multifactorial disease such as diabetes.  Pre-existing patents have become a barrier to market entry.

As the Science article reports, gene patents cover not only very small snips of DNA, as short as 15 nucleotides, but can prohibit the sequencing of associated DNA. Companies such as 23andMe that sequence an individual’s genome to test for the presence of certain genes may be violating patent rights of others.

What’s more so called “method” patents cover the linking of a gene sequence with a specific medical condition.

As advances in personalized medicine continue, there is a need to balance the competing interests of protecting scientific discovery and rewarding innovation, while at the same time allowing access to human genetic information that many think should be “free to all men and reserved exclusively to none.” Quotation from Bilski v. Kappos, 130 S.Ct. 3218, 3225 (2010)

A law suit currently on appeal to the US Court of Appeals for the Federal Circuit may lead to a change in the current practices of the US Patent & Trademark Office.  The American Association of Pathologists and others have challenged several patents relating to the breast cancer genes BRCA1 and BRAC2 held by Myriad Genetics and the University of Utah Research Foundation.

BRCA1 and BRCA2 genes are associated with an increased risk of breast and ovarian cancer.  The US district court for the Southern District of New York in a surprise decision by Judge Robert Sweet, invalidated Myriad’s patents.  The New York Times article about the case has a link to the Judge’s 156 page opinion.  The decision that isolated but otherwise unaltered DNA should not be patentable is now being appealed by Myriad.

In their legal brief, arguing for the decision to be upheld, the United States Government states:

“The fact that a particular segment of the human genome codes for the BRCA1 protein in a human cell, for example, rather than for adrenaline or insulin or nothing at all, is not within the power of science to alter. Such basic natural relationships may not be the subject of a patent.”

If the District Court’s decision is upheld on appeal, it would represent a fundamental policy shift on what patents can be obtained for human genetic information. Such a decision would prevent Myriad from charging royalties and exclusivity for the genetic testing of BRCA1 and potentially invalidate similar types of patents. Depending on your point of view this will either harm the biotechnology industry or increase the market opportunities.

Given the stakes involved, it is likely the Myriad case will end up being considered by the United States Supreme Court, and what they may decide is anyone’s guess.

To read more in-depth analysis about the Myriad case and the legal issues involved with the patenting of genomic information, I strongly recommend the “Genomics Law Report”, a blog written by Dan Vorhaus and others.

Ten years after the human genome was sequenced we are still working out the intellectual property rights. The question as to whether companies should be allowed to patent unaltered human genes is one that will be answered in the not too distant future.

I will be at WordCamp Phoenix tomorrow, along with 650 other attendees, for what is set to be an exciting meeting. Not only is it a great opportunity to escape the lousy New Jersey weather, but the meeting program is awesome.

I’m looking forward to learning from WordPress experts and enthusiasts about how I can improve this blog, its design, marketing and functionality. Saturday’s session schedule can be found here.  I have to say the volunteers who set up this meeting have done a great job!!

What’s more, I will be giving a lightning talk (20 slides in 5 minutes) on how to submit a takedown notice under the Digital Millennium Copyright Act (DMCA).  This is my first time doing an Ignite style lightning talk, and the first time speaking before 650 people, so I’m a bit nervous, but life is about new challenges and opportunities.  Should be fun, and if all fails there’s the after party to look forward to!!

I’m looking forward to meeting new people and having a good time at WordCamp Phoenix this weekend.

World Intellectual Property Organization LogoIntellectual property (IP) rights are important in the biotechnology industry; one only has to look at a licensing, consulting or service agreement to appreciate this.

If you are a non-lawyer new to the area, and wish to gain a basic understanding of the different types of intellectual property protection such as copyright, trademarks, industrial design, patents and unfair competition, then the World Intellectual Property Organization (WIPO) Academy offers a free general course (DL-101).

The course is delivered online, twice a year, over 6 weeks.  If you are a native English speaker, it takes far less time to complete than the 50 hours suggested.  What makes the course work well is you can download the study material as PDF files. These can then be read anywhere – I used my kindle.

An additional benefit, if you have an ego wall in your den or office, is that WIPO send you a certificate after you pass a final exam.  When I lived in the UK, I put all my certificates on the wall in the downstairs toilet,  an idea I “borrowed” from Mrs Thatcher’s eye surgeon when I had dinner at his home. British understatement at its best.

Although the WIPO general course is not focused on biotechnology or the life sciences industry, it does provide a useful overview of international treaties and IP regulation to build upon.  It is worth considering if you are new to the area.

With best wishes for the New Year, may it bring you good health, happiness and prosperity.

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