12 March 2012

Generics Unsuccessful in CRESTOR Injunction Challenges

Apotex Pty Ltd v AstraZeneca AB (No 2) [2012] FCA 142 (28 February 2012)
Watson Pharma Pty Ltd v AstraZeneca AB [2012] FCA 200 (9 March 2012)

Interlocutory injunctionsprima facie case – balance of convenience – whether additional evidence provides grounds to vary previous findings

GenericAt least five Australian pharmaceutical manufacturers are now ready to launch generic versions of cholesterol-lowering drug CRESTOR, while being barred from doing so pending the outcome of litigation over three patents held by the original manufacturer, AstraZeneca AB.

Back in December, Apotex Pty Ltd was unsuccessful in opposing an application by AstraZeneca for a preliminary injunction barring the sale by Apotex of a generic version of CRESTOR (see Preliminary Injunction for CRESTOR—Not All ‘Tablets’ are Equal).  Apotex had decided to contest the application only at the last minute, in the hope of preventing the grant of a limited injunction until 31 January 2012 pending a full hearing between the parties on the application.  Instead, the court granted an indefinite injunction finding that, having heard a substantive case from both parties, it was not appropriate to presume that Apotex was entitled to a further opportunity to oppose the injunction.  ‘Put simply,’ said Justice Rares, ‘a party is entitled to one bite at that cherry.’

This did not prevent Apotex from appearing before Justice Emmett on 31 January and arguing its case once again, this time armed with the evidence which it had not yet fully prepared at the time of the earlier hearing.

Meanwhile, two other manufacturers – Watson Pharma Pty Ltd and Ascent Pharma Pty Ltd – have been gearing up to follow Apotex’s lead in launching their own generic rosuvastatin products (rosuvastatin is the active ingredient in CRESTOR), and also faced applications by AstraZeneca for preliminary injunctions.  These applications were heard by yet another judge – Justice Jagot – on 1 March 2012.

So substantially the same issues have now been canvassed before three different judges of the Federal Court of Australia – whether AstraZeneca has made out a prima facie case of infringement, and whether the balance of convenience favours the granting of interlocutory relief – and all three have reached the conclusion that a preliminary injunction should be granted.

In addition to the injunctions granted against Apotex, Watson and Ascent, two other generic manufacturers, Actavis Australia Pty Ltd and Sandoz Pty Ltd reached out-of-court agreements with AstraZeneca resulting in the grant of injunctions on the agreed terms.

APOTEX

At the hearing before Rares J in December, his honour made it quite clear that, in his view, if Apotex chose (as it subsequently did) to fight Astra on the evidence, it would not get a ‘second bite’ because it would have fought the interlocutory injunction as a matter of substance.  He observed that ‘if you dip your toes in the water too far, you will find that there is no reason that the Court should let you have several bites of the cherry’.

The decision of Justice Emmett (in particular at paragraphs [9]-[13]) clarifies the events which took place before Justice Rares in December.

Apotex’s lawyers argued that, regardless of the decision reached by Rares J, Apotex should have the opportunity to contest the hearing on 31 January 2012 on different evidence.  The judge noted that it is usual, after a contested interlocutory hearing, for any injunction granted to stand until the trial.  Apotex nonetheless elected to oppose the application for interim relief up to 31 January 2012 relying on several affidavits disputing that its product would infringe any of Astra’s patents and advancing evidence in support of its contention that the patents are invalid.

In the event, Rares J found that Astra had established a prima facie case of infringement, and that the balance of convenience favoured the grant of an injunction.  He therefore granted the injunction, observing that an application could be made on 31 January 2012 for it to be discharged.  However, Rares J reiterated his opinion that Apotex should not automatically be entitled to a further ‘bite of the cherry’.

It was against this background that Apotex appeared before Justice Emmett, now armed with the additional expert evidence that was still in preparation back in December.

His honour was not satisfied that any new evidence brought forward by Apotex led to a different conclusion from that originally reached by Rares J.  However, Emmett J noted that there are parallel proceedings underway involving other generic manufacturers, and he was therefore reluctant to dismiss Apotex’s motion in case any matters arising in the other proceedings should change the circumstances (at [46]):

I was not persuaded that any additional evidence adduced by Apotex is of such a character as to lead to the conclusion that the findings of Rares J should be varied. In the circumstances, I concluded that I should not, at this stage, accede to the application by Apotex to vary the terms of the injunction granted on 14 December 2011. However, Astra has commenced proceedings against other generic suppliers of rosuvastatin. Those proceedings are listed … on 1 March 2012. … If it were not for the fact that those other proceedings were listed for the purpose of considering interlocutory relief, I would have dismissed the present motion with costs. The present motion will be listed for hearing on 1 March 2012 on the basis that it will be treated as a fresh application to vary the orders made by Rares J on 14 December 2011 by reason of any change in circumstances that might arise as a consequence of orders made in the other proceedings.

The primary concern here is, presumably, that if an injunction were not issued against the other manufacturers, it would be unfair to maintain an injunction barring Apotex from competing against the in the market for generic rosuvastatin.

WATSON & ASCENT

As it happened, however, Emmett J need not have been concerned.

Following the interlocutory hearing in relation to Watson and Ascent, Justice Jagot followed Emmett J in finding that AstraZeneca has established a prima facie case that the generic manufacturers proposed products would infringe at least one of its patents.  In relation to the balance of convenience, her honour found (at [31]):

…I share the view Rares J reached that the balance of convenience, fairly overwhelmingly, favours preservation of the status quo pending the final outcome of the proceedings between Astra and the multiple other parties. As Astra submitted: - (i) the proposed trade of Watson Pharma and Ascent is new and, indeed, does not presently exist, (ii) in contrast, Astra has marketed and sold Crestor for five or more years, it being a highly successful product, (iii) the patents are long-standing (sealed in 2004, 2005 and 2007 respectively) and have not been challenged as invalid during their existence until now, (iv) Watson Pharma and Ascent have acted with their “eyes open” and must have known that Astra would seek to enforce its patents (revocation proceedings were not commenced until 23 December 2011), and (v) the relative harm to Astra if no injunction is granted for the threatened infringement would far outweigh the harm Watson Pharma and Ascent will suffer if an injunction is granted. On the evidence I am not persuaded either that damages would be an adequate remedy for Astra … or that damages in the case of Watson Pharma and Ascent will be impossible to quantify.

CONCLUSION

The position – for now at least – is that AstraZeneca has been successful in obtaining injunctions preventing all five generic manufacturers from launching rosuvastatin products in competition with CRESTOR.

However, Apotex is not yet done with its efforts to circumvent the injunction against it, with a further hearing set down for 13 March 2012, before Justice Jagot, to determine whether changes in the coating of its generic rosuvastatin product will be sufficient to avoid the reach of AstraZeneca’s patents.

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