If Oil States eradicates IPRs, how much will AbbVie gain? Coherus lose?
The Supreme Court has heard oral argument in Oil States v. Greene’s Energy, and a decision whether IPRs are unconstitutional is currently pending. For companies currently embroiled in IPRs that could directly impact their bottom line, the Supreme Court’s decision could be very tangible. AbbVie ($ABBV) and Coherus Biosciences ($CHRS) are a case in point.
AbbVie’s blockbuster HUMIRA® is now facing encroaching biosimilars. AbbVie has surrounded HUMIRA® with a wall of more than 70 patents, which we previously wrote about in detail. That extensive patent estate has already served AbbVie very well to keep biosimilars at bay. Amgen was the first biosimilar to file an aBLA with FDA. AbbVie and Amgen engaged in the patent dance, and commenced a patent lawsuit, but recently settled for an entry date in early 2023.
Coherus has yet to file its aBLA for a HUMIRA® biosimilar, but it has already preemptively attacked HUMIRA® patents. Coherus filed IPRs against three HUMIRA® patents, including U.S. Patent Nos. 8,889,135; 9,017,680; and 9,073,987. Coherus prevailed on each of those IPRs, and they are currently on appeal before the Federal Circuit. Those appeals were docketed in July 2017. Technically, if Oil States is decided in June, and the Supreme Court holds IPRs are unconstitutional, then those appeals could still be pending at that time. Theoretically, at that point, AbbVie could move to terminate the appeals and vacate the IPR decisions. (That said, in the event the Supreme Court deems IPRs unconstitutional, it is far from guaranteed that patents previously invalidated in IPRs will necessarily come back to life. But this post assumes IPR decisions could be vacated.)
How material are these IPRs? The ‘680 and ‘987 patents are arguably not that material, because they will expire in June 2021. At this point, Coherus has yet to file its aBLA for HUMIRA®. After it does, assuming that it engages in the patent dance with AbbVie, that will take approximately nine months. As revealed by AbbVie’s earlier case against Amgen, and discussed here, AbbVie has lots of other patents. Indeed, in its complaint AbbVie lamented that the BPCIA rules prevented it from asserting all 60-plus patents right away, but it nonetheless intended to do so eventually. In short, regardless of whether the IPRs against the ‘135, ‘680 and ’987 patents stand up, there will still be a patent litigation. That litigation will conservatively last two or three years. Add another year for a Federal Circuit appeal. That’s already approximately five years from the date when Coherus files its aBLA. That is assuming there is no settlement. In short, the ‘680 and ‘987 patents will likely expire by or near the time Coherus can gain freedom to operate through litigation.
By contrast, the ‘135 patent is likely more material because it will not expire until October 2024. Although the patent claims priority to a provisional application filed in 2001, and it would ordinarily expire in 2021, AbbVie successfully petitioned to extend the life of the patent (through Patent Term Extension.) Those additional three years may prove to be material to AbbVie. The company has already kept Amgen at bay until early 2023, and leveraging a single patent to keep Coherus at bay for another 22 months could be very material to AbbVie, given the size of HUMIRA® as a drug.
There is another wrinkle. The ‘135, ‘680 and ‘987 patents are each directed to dosages for treating rheumatoid arthritis. In other words, they are indication or method of use patents. HUMIRA® is indicated for several indications. While rheumatoid arthritis is likely one of the biggest indications, these patent would not theoretically stop Coherus from entering with a biosimilar for other indications, such as psoriasis. There might be a scenario where Coherus can enter for indications other than rheumatoid arthritis, but the lower-cost biosimilar version nonetheless picks up off-label revenue.
Coherus has filed other IPRs against HUMIRA® patents, but they have not been successful. In early 2017, Coherus filed six separate IPRs against U.S. Patent No. 9,085,619. The ‘619 patent is a fairly broad formulation patent that is likely difficult for Coherus to design around. That is indirectly evident from Coherus’ attempt to preemptively invalidate the patent through multiple IPRs. Worse, the patent expires in 2027, which is several years after expiration of the ‘135 patent. Thus, the ‘619 patent presents a meaningful obstacle to earlier entry. Coherus, however, lost all of its IPRs against the ‘619 patent. As of September 2017, each IPR was either been denied institution or voluntarily dismissed.
AbbVie’s success on the ‘619 front is not in jeopardy by the Supreme Court’s decision in Oil States. Indeed, fighting back the challenge to the ‘619 patent may, at the end of the day, prove more material to AbbVie’s battle to keep Coherus at bay than Coherus’s IPR against the ‘135 patent.