Clinical trials in BioPharma

Biotechnology companies, however, are sometimes unprepared for the intellectual property considerations that arise as a promising drug (either their own or one licensed from a university) progresses through clinical trials. Eric Steffe explains.

As companies that have at least one approved product know, numerous issues emerge that go far beyond procuring patent protection for the product and the company’s platform technology. These issues include seeking patent protection for downstream discoveries, the renewed importance of process patents, data exclusivity, inventorship disputes, and clearance of third-party patents covering commercial manufacturing methods and patient administration protocols.

Downstream discoveries and corporate publication policies

Creating a strong exclusivity position through patent protection is important for biotechnology companies to raise financing, attract partners and block competitors. However, a patent application claiming a lead product is normally filed shortly after the product is made (i.e. before the product enters clinical trials). Such ‘product patents’ often have expiration dates that only provide a few years of exclusivity after FDA approval.

Thus, seeking patent protection for later discoveries that arise during the clinical trials process is a necessity for obtaining additional patent term. Indeed, certain well-known biological drugs are protected by patents encompassing downstream discoveries, which may provide patent terms extending some 12 to 15 years beyond the expiration dates of the lead product patents.

Following the practice of large pharmaceutical companies in the small molecule arena, established biotechnology companies maximise the possibility of obtaining downstream patents in two ways. First, they rigorously ‘mine’ experimental protocols and data generated during clinical trails for potentially patentable inventions. Such companies flood the US Patent and Trademark Office (USPTO) with applications, out of which at least a subset of the total number filed are granted as patents.

Indeed, emerging companies are sometimes surprised to learn about, and have rarely budgeted for, the vast scope of subject matter for which patent protection can be sought.

These include vectors, dosing schedules, dosage forms, pharmacokinetic data, new indications, adverse events, route of delivery, biomarkers, combination therapies, cell culture conditions and media, host cells, purification methods, purity profile, formulations, drug storage and reconstitution, personalised medicine and scale-up procedures. In sum, established companies view the lead compound as merely the starting point for patent protection.

Second, established companies avoid unnecessarily creating prior art against themselves. This can be a difficult balance to achieve for many companies in biotechnology where a publication culture may be deeply imbedded from origins in academia. While there are compelling business reasons to publish, whether to maintain investor interest, retain scientific talent or attract collaborators, publications should be co-ordinated with patent filings.

Commonly encountered publication policies require delaying publication until after an initial patent application is filed. While logical, and indeed suitable in many situations, such a policy is frequently inadequate if the goal is to maximise long-term patent protection. In biotechnology in particular, a more detailed disclosure is necessary for the applicant to support a patent claim than is necessary for an examiner to raise an obviousness rejection based on prior art.

For example, dose predictions based on preclinical animal model data in the first patent application may be too inaccurate to support a patent claim covering a different dose schedule later deemed in clinical trials to be most suitable for humans. Nonetheless, if the model data has been published by the company, it may be ‘close enough’ for an examiner to support an obviousness rejection when combined with other prior art references.

While it requires living with uncertainty, the best publication policy for companies desiring to maximise long-term patent protection may be to avoid bright-line rules. Preferably working closely together, the company’s patent attorneys and scientists should make judgement calls about whether the supporting data is ripe enough to adequately support commercially relevant patent claims. If not, absent some overriding need to publish, accepting an occasional significant publication delay may be in a company’s best interest.

The Biologics Price Competition and Innovation Act of 2009

The Biologics Price Competition and Innovation Act of 2009 (Biosimilars Act) has provided, for the first time, an abbreviated regulatory pathway for follow-on biological products. As compared to the Hatch Waxman Act of 1984 (which created an abbreviated pathway for small molecule generics), the Biosimilars Act provides a very different patent dispute-resolution procedure that places increased importance on process patents.

First, as part of the statutory patent dispute-resolution procedure, the process of making a biosimilar product must be disclosed by the generic applicant to the FDA approval holder, although there is still uncertainty whether the FDA and/or the courts will force generic applicants to disclose every detail. In any event, in contrast to Hatch Waxman, this requirement of the Biosimilars Act largely eliminates the commonly heard concern that process patents can be hard to police.

Second, the Biosimilars Act recognises two classes of biosimilar products: biological products that are ‘biosimilar’ to an approved product and biological products that are ‘interchangeable’ with an approved product.

Only products deemed interchangeable can be substituted for an approved product by a pharmacist without the intervention of the healthcare provider who prescribed the approved product. In contrast, biosimilar products that are not deemed interchangeable by the FDA require a separate prescription. Clearly, whether a biosimilar product is ‘interchangeable’ or just ‘biosimilar’ has major financial ramifications for both the innovator patent holder and the potential generic challenger.

It is generally accepted in biotechnology that the ‘process is the product’. For example, in 2002, Genentech and XOMA reported that minor manufacturing modifications made to allow for large-scale production of Xanelim™ (efalizumab) increased serum concentration. Thus, a generic challenger forced to invent around process patents to avoid patent infringement runs the risk of altering a biological product’s profile. In short, the more process patents that must be invented around, the less likely it is that a biosimilar product will be interchangeable.

Data exclusivity protection is not the same as patent protection

The Biosimilars Act also provides data exclusivity to the approval holder, prohibiting the FDA from approving biosimilar products for 12 years after the reference product was first licensed by the FDA. In contrast, data exclusivity for new chemical entities (i.e. small molecule drugs approved for the first time under Hatch Waxman) is only five years. The 12-year versus five-year discrepancy is very controversial and some believe will be addressed legislatively.

Data exclusivity applies against generic applicants seeking abbreviated approval under the Biosimilars Act, but not against competing follow-on biologicals (e.g. bio-betters, etc.) for which ‘regular’ approval is sought. In contrast, patent protection applies generally and can be obtained anywhere along the development lifeline of a drug. So with good patent protection, it may be possible to stop the sale of a follow-on biological drug in situations where data exclusivity does not apply.

Inventorship disputes

Developing a biological product through FDA approval typically involves interacting with a significant number of outside collaborators, including service providers, scientific collaborators and clinical trial investigators. As positive reports emerge from clinical trials and a drug’s prospective value increases, companies are sometimes contacted by past collaborators (or, more likely, their attorneys) alleging that the collaborator should also have been named as a co-inventor.

While inventorship disputes cannot be totally avoided, a few relatively simple safeguards can be put into place to minimise risk. First, all collaboration agreements should be put in writing before the collaboration begins to minimise opportunistic claims by collaborators that their inventive contributions occurred outside of, and are not bound by, the terms of the agreement.

Second, the agreement should be structured such that inventorship does not drive ownership. In other words, the company should consider only collaborating with those willing to agree contractually to automatically assign any inventions to the company.

Inventorship disputes can be much more than a nuisance. US law provides that, absent a contract stating otherwise, an inventor of a single claim of a patent is a co-owner of the entire patent even if the inventor is not an inventor of any other claim. And, absent a contract stating otherwise, co-owners of US patents are free to assign or license them to third parties without accounting to the other co-owner(s).

Third-party patents

Typically, companies perform collection searches (also termed freedom to operate studies) for third-party patents and published patent applications in stages. Initial searches often occur prior to entering clinical trials and involve ‘clearing’ the target, screening methods, the actual product and potential indications.

Once clinical trials are entered, however, the searches become more detailed and include commercial manufacturing materials and methods, such as expression vectors, production cells, culture conditions and media, as well as patient-focused protocols, such as dosing schedules, dosage forms and pharmacokinetic data.

It is important before commercial manufacturing methods and patient administration protocols are set with the FDA (which may occur in phase II) to identify all relevant patents and patent applications that may issue in the future. Also, it is important that there is a satisfactory strategy, whether obtaining a licence or relying on a non-infringement and/or invalidity position, for each relevant patent. For obvious reasons, it is preferable to invent around third-party patents prior to reaching the latter stages of clinical trials.

Eric K. Steffe is a director at Sterne, Kessler, Goldstein & Fox P.L.L.C. He can be contacted at: esteffe@skgf.com

The author would like to thank Jorge Goldstein and Elizabeth Haanes for their editorial comments.