Biotech Values

[Biopharm investor]

Dew

“1. Your list of companies that have launched matches the list of approved ANDA’s in the drugs@fda database with the following exceptions: American Health, GSMS, Unit Dose Labs, and United Research Labs are on your list but not the drugs@fda list.”

These companies are all repackagers, except for United Research Labs, which has some affiliation with Mutual and I think is selling Mutual's product. As an FYI, I'm pretty sure UDL is a subsidiary of Mylan.

“Interpharm and Watson are on the drugs@fda list but not on your list. Are some of the names on your list licensees of Interpharm or Watson?”

Interpharm is a small company (I think they have about 12 products) that has an approved gaba file, but to my knowledge, has never commercialized it.

“If not, is the drugs@fda list simply unreliable?”

I don’t know. I just pulled the companies selling gaba from our market research report which is taken from IMS and lists all companies selling a drug and their share.

Perhaps the difference is the site you're using identifies companies with FDA-approved ANDA's, whereas IMS shows companies that are actually marketing the drug. The two are not always the same.

“2. Do treble damages apply in this case if PFE prevails at trial?”

I don’t know. I think it’s possible but highly unlikely. To get treble damages there has to be willful infringement. The standard for willful infringement (and hence treble damages) is very high..almost a complete and reckless disregard by the infringer. It’s unlikely that a company that prevailed in a PI as is the case here could be said to have willfully infringed.

There’s a recent (i.e., August 20, 2007) US Court of Appeals case (Seagate Technologies) that contains some language that illustrates what kind of behavior the courts view as “willful infringement", including the impact of having successfully avoided a PI.

http://www.fedcir.gov/opinions/M830.pdf

While the whole case and discussion is illuminating, the following language from page 17 of the document linked above indicates that prevailing on a PI is likely sufficient to avoid “willful infringement”:

“We fully recognize that an accused infringer may avoid a preliminary injunction by showing only a substantial question as to invalidity, as opposed to the higher clear and convincing standard required to prevail on the merits. Amazon.com, 239 F.3d at 1359 (“Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself.”). However, this lessened showing simply accords with the requirement that recklessness must be shown to recover enhanced damages. A substantial question about invalidity or infringement is likely sufficient not only to avoid a preliminary injunction, but also a charge of willfulness based on post-filing conduct. “

Also, while juries decide the issue of “willfulness”, judges assign monetary values for treble damages. Historically, damages involving willful infringement have been around 1.5X damages – not the maximum allowable of 3X damages.

Finally, the existence of PIV insurance is also a consideration.

“3. Do you expect that any of the generic entrants will voluntarily cease marketing as a result of the appellate decision to order a trial?”

No.

Regards