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26 June 2020Big Pharma

English appeals court refuses Neurim injunction for insomnia drug

The English Court of Appeal has rejected  Neurim’s attempt to block sales of a generic version of its insomnia drug made by  Mylan ahead of a patent infringement trial.

On Wednesday, June 24, Lord Justice Floyd delivered the court’s  opinion, dismissing Neurim’s appeal against the English High Court’s recent refusal to grant an injunction ahead of trial four months later.

The Court of Appeal concluded that Neurim would be adequately compensated with damages if it were to win a permanent injunction at trial, which is scheduled for late October, and that these damages could effectively be calculated by the court.

Earlier this month, the High Court  refused to grant an interim injunction to Neurim to stop Mylan’s alleged use of the patent-at-issue, EP(UK) 1,441,702 B1. The patent covers Neurim’s Circadin, a medication that contains melatonin and is used to treat insomnia.

The patent was granted by the European Patent Office (EPO) in 2017, but it was subsequently held to be invalid and was revoked by the EPO’s Opposition Division after opposition by Mylan and others.

While the EPO’s decision has been appealed, the High Court thought it unlikely that a final decision on the appeal would be made before 2022 at the earliest. The patent is due to expire in August 2022 and, in the meantime, the effect of the Opposition's Division's decision is suspended, and the patent remains in force.

Last week, the Court of Appeal heard the appeal on an expedited basis by remote video-conferencing. The next day, the court informed the parties by email that it had dismissed the appeal and, earlier this week, it outlined its reasoning.

Neurim had argued that Justice Marcus Smith of the High Court had failed on ten different counts, including failure to appreciate the consequences of giving the green light to other generic competitors and failure to have regard to Neurim’s evidence.

Neurim argued that the judge was wrong to not take into account the consequential loss and should have accepted Neurim’s evidence as to this loss. Neurim’s evidence explained what would happen to its business if it were to lose revenues from Circadin, its main source of revenue. It claimed that large parts of its operation would be shut down if these revenues were lost.

But, Floyd said he was unable to accept these submissions.

“The judge was not bound to accept uncritically the evidence of Neurim and Flynn as to whether the consequential loss would occur. I would go further and say that he was bound to examine the claims made in the evidence of Neurim and Flynn with a critical eye, given the very short period of generic competition which they would face in the light of the expedited trial,” he said.

The expedited trial date gave a different perspective to the case, said Floyd, bringing into “sharp focus the question of whether a price spiral would be likely to occur between now and the trial”. While the High Court didn’t attempt to decide this point, Floyd formed his own view.

“I start with the undisputed fact that the period from now to the trial is just over four months,” he said, adding that this was a very short timescale for the “dramatic price effects foreseen” by Neurim’s licensee Flynn to take place.

According to the judge, while the launch of a second generic in the period up to trial is a possibility, the evidence provided “fell a long way short of establishing that it was likely”.

Mylan's evidence was that only Mylan, and possibly Teva, were ready to launch in the UK. Neurim's case before the judge was that Teva couldn’t launch before trial, because they had agreed as part of a settlement agreement with Neurim not to launch in the UK.

Before the court, Neurim’s representative argued that the consequential loss was realistic because, once a product has become generic, there is no longer any point in investing in the type of activities which Neurim and Flynn support.

“It would, as he put it, be flogging a dead horse in the sense that the investment would be being made for the benefit of the generic competitors,” said Flynn, before stating that he was “wholly unpersuaded” by this.

He said: “I see no reason why the investment in Circadin, if worthwhile for the two years remaining of the patent's life, becomes pointless if the period of exclusivity is reduced by four months, and the reduction in expected revenue is replaced by an award of damages.”

Flynn then turned to whether the calculation of the damages to which Neurim and Flynn would be entitled, if they succeeded in obtaining a permanent injunction at trial, is of such complexity as to render their remedy in damages inadequate.

Siding with the lower court, the Court of Appeal concluded that “extremely unusual facts” of this case do not give rise to such difficult questions of computation of damages as to trigger the exercise of the court's discretion to grant an injunction.


More on this story

Europe
26 May 2022   The case reinforced the need for interim injunction applications to be made as quickly as possible, explains Lydia Birch of EIP.
Americas
8 December 2020   Neurim Pharmaceuticals has won its case against generics drug maker Mylan at the English High Court, which held that its patent for a treatment for insomnia was valid and had been infringed in a ruling handed down on December 4.
Big Pharma
2 November 2021   Mylan has failed to secure a stay in litigation centring on a melatonin-based insomnia patent at the English High Court.

More on this story

Europe
26 May 2022   The case reinforced the need for interim injunction applications to be made as quickly as possible, explains Lydia Birch of EIP.
Americas
8 December 2020   Neurim Pharmaceuticals has won its case against generics drug maker Mylan at the English High Court, which held that its patent for a treatment for insomnia was valid and had been infringed in a ruling handed down on December 4.
Big Pharma
2 November 2021   Mylan has failed to secure a stay in litigation centring on a melatonin-based insomnia patent at the English High Court.