Download - How to Protect your Intellectual Assets › chi › promotion_edu › seminars › IAM › 13_lui… · How to Protect your Intellectual Assets The Pharmaceutical Industry way 22nd

Exclusively focused on pharmaceutical fine chemicalsConfidential Hovione 2006

How to Protect your Intellectual AssetsThe Pharmaceutical Industry way

22nd of November 2006

Luis Gomes

HKIPD Seminar, 22 NOV 2006

2


3


4

Figures and Facts

2005 World Best Selling Pharmaceutical Products

$5.3bMerck & CoZocor (Simvastatin)5

$5.6bGSKSeretide/Advair(Fluticasone+Salmeterol)

4

$5.7bAstra ZenecaNexium (Esomeprazole)3

$5.9bSanofi-Avetis/BMSPlavix (Clopidogrel)2

$12.9bPfizerLipitor (Atorvastatin)1

US SalesCompanyProductRank


5

Figures and Facts

For products under patent protection, gross profit margin is usually over 90% of their selling price

Lipitor by the day…35MUSD/day in sales, and32MUSD/day in Gross Profit

With numbers like this, every day counts!


6

The Patent Story…

This is only possible because these products are patented;

Patents provide a temporary monopoly for the products they cover;

A patent provides a state protected temporarymonopoly;

During their lifetime, patents allow the pharmaceutical companies to have super-normal profits;


7

The Patent (or Monopoly) Lifecycle…

Initial patent life of a NME (New Molecular Entity) usually runs for 20 years from the date of filling;

After patent filling the originator company have to:Conduct pre-clinical trials;Conduct clinical trials;File the resulting data on the Health Authorities (FDA,etc);Wait for approval;

In average, by the time of the market authorization, there will only be 10-12 years left of patent protection;


8

The end of the monopoly…

By the day the patent protection expires, other companies can start commercializing the same product;

In the US they can not brand mark a product already out of patent protection;

They have to sell it as per the recognized IDC API name the so called Generic name – the generics;

In the US, branded products loose about 80% of their revenues within two months of patent expiry;

Some calculations…If you are selling 35MUSD/day, you will loose 28MUSD/day!


9

What do they do with the money?

Why Pharmaceutical companies need super-normal profits?Effective patent protection is relatively short in time:

10 – 12 years;

Huge R&D investment required to bring a product to the market:

US$1b per product;

“Dry wells”1 in 5 products entering the clinical test phase is approved by the FDA1 in 250 products entering the pre-clinical testing is approved by the FDA


10

Patents – extending the lifecycle

What do you do when someone gives you a temporary monopoly?

You don’t want it to be temporary…

What do Pharmaceutical Companies do:

‘Enriching’ the product:New formulations (New Formulation Exclusivity);New indications (New Indication Exclusivity);

‘Re-discover’ the product:Polimorphs – different crystalline forms;Pure isomer patents;


11

Patents – extending the lifecycle

The legal tools..TRIPS (Trade-Related Aspects of Intellectual Property);SPC (Supplementary Protection Certificates);FDAMA- pediatric studies;Hatch-Waxman;Orphan Drug Exclusivity;...for the inventive company a full range of legal tools help to transform patents on a never ending story

Litigation – all the wayAFE act – Attorney Full Employment Act…Generic companies have legal departments that are bigger than their R&D departments…


12

Selected Examples…

Prilosec or Losec (Omeprazole) was the world best selling drug by year 2000 (worldwide sales of US$6.1b/year;Marketed by AstraZeneca;Patent should have expired back in 1998;With a little help from the legal tools this slipped to Oct. 2001;Between 1998 and 2001, Astra Zeneca filled 19 new patents on Omeprazole !This created a patent ‘minefield’ covering everything: substance, process, indications, formulations extending up to 2018… (key patents cover formulation till 2007)


13

The Losec/Nexium case

In the meantime, the generic company Andrx got a Omeprazole ANDA on the FDA pending for approval;

Astra Zeneca sued Andrx on October 2001;

To read the Omeprazole patent litigation (patents 4’786’505 and 4’853’230) is fascinating…

…but the assistance of an attorney familiar with patent law is recommended;

Along a 200 pages (!) decision, the courtroom discusses at length the precise meaning of pharmaceutical technology common words like: “subcoat”, “pH-buffering”, “effective amount”,…

Quite fascinating and educational…


14


On October 2002 a US court ruled on the validity of Omeprazole formulation patent but generic companies appealed

Finally on the 1st of November 2002, Kudco’s/Schwarz Pharmageneric omeprazole was approved

AstraZeneca knew that was going to loose the case

…but the intention was not to win. They only aim to delay the final court decision

Remember: US$6.1b a year on sales is the same as US$17M a day…


15


In March 2001, AstraZeneca got approval for Nexium(Esomeprazole)

Omeprazole/Esomeprazole – More than a name in common

Omeprazole and Esomeprazole have the same molecular structure…but different 3-dimensional orientation in space

Prilosec is in fact a mixture of Omeprazole and Esomeprazole. Nexium is only Esomeprazole

Nexium was AstraZeneca Nex(tbill)ion


16


Between March 2001 (date of Nexium approval) and November 2002 (expiry of Losec patent), Astra Zeneca launched a massive advertising campaign;

Purpose?

To switch Losec customers to Nexium;NOTE- there’s no evidence that Nexium works better than Losec;Nexium is a ‘me-too’ drug;

Astra Zeneca was (very successful):

Nexium is now a US$5.7b/year product…


17

US vs The World

We have been speaking mainly about US cases, involving the biggest nemes in the industry and the most profitable worldwide products…

…but, what about us?

What about China…

From the Time Asia Magazine (30 of October 2006):“In 2004, nanoscientist Lu Ke unveiled a machine that can apply a thin layer of superstrong nanocopper on another material, potentially adding years to the life of industrial tools. Already pirated models of his machine have turned up in China. Can he take legal action? Lu just shrugs and laughs.”


18

The China way

Put a CDA in place……but don’t think that the CDA will protect your IP…;Questions to ask yourself…

Have you visited them?Have you met the management?What is the staff rotation?Do they speak with you about their other customers/projects?Are there factories on a 100Km radius doing the same (or just next door)?

IP ‘travels’ with the persons.


19

The India way – or the parking lot way

From a colleague of mine covering India;

The Parking Lot way:

“I went to Company A with 3000 employees and I saw this huge parking lot with…hundreds of bycicles and maybe 50 old cars”

“Then I went to this Company B, 75Km down the road. They have now 500 employees. I asked to see their parking lot. It is small and cramped but they had almost 100 brand new cars”

Guess who’s going to move?

Remember: IP ‘travels’ with the persons.


20


21


22

Thank youFor more information, please contact:

Luis Gomes

Tel: +853 8934 119

[email protected]

Hovione PharmaScience Limited

Estrada Coronel Nicolau Mesquita • Taipa • Macau

www.hovione.com