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Can Corcept’s amended complaint hold back Teva’s generic for Korlym®?

Zachary Silbersher

We previously discussed Teva’s ($TEVA) motion to dismiss Corcept Therapeutic’s ($CORT) Hatch-Waxman lawsuit commenced in response to Teva’s ANDA for Korlym®.  In response to that motion to dismiss, on July 6, Corcept filed an amended complaint.  What are the implications of that?  And how does the case currently dovetail with the pending patent applications?

How is the amended complaint different from the original complaint?

At the outset, Corcept’s amended complaint alleges infringement of a new patent, U.S. Patent No. 9,943,526.  This is not surprising.  As we previously discussed, the Patent Office issued the new ‘526 patent in April of this year, and soon after, Corcept listed that patent in the Orange Book for Korlym.  In response to that, Teva filed another Para. IV notice letter, and in response to that notice letter, Corcept added it into the amended complaint.  That said, Corcept would have worked this patent into this case, or alternately into a parallel case, even if it chose to respond to Teva’s motion to dismiss on the merits rather than filing an amended complaint. 

We compared Corcept’s original complaint with its amended complaint.  Corcept definitely puts some more meat on the bone, and includes more substantive allegations of Teva’s alleged infringement.  But it is not necessarily an abundance of more information, and whether it is sufficient remains to be seen.  Teva will most likely file another motion to dismiss shortly, which will test those added allegations in the amended complaint. 

Teva’s prior motion to dismiss previously argued that Teva is not a direct infringer of Corcept’s patents.  Corcept does not add any more substantive allegations that Teva is directly infringing the asserted patents.  And that is most likely because the patents are method patents, and Teva does not treat patients.  But this case was never really going to be about direct infringement, but rather about indirect infringement.  So this is not really a game-changer.

On the other hand, when it comes to indirect infringement, Corcept did add more substantive allegations.  For instance, the ‘348 patent is directed to optimizing mifepristone blood levels.  Corcept’s amended complaint now alleges, “according to Teva’s 1st Notice Letter, Teva will instruct prescribers to increase the dose of Teva’s Proposed Products ‘based on a clinical assessment of tolerability and degree of improvement in Cushing’s syndrome manifestations.’” 

It is not clear if Corcept is quoting directly from Teva’s notice letter, but even so, the patent requires treating a patient with seven daily doses, optimizing blood levels to greater than 1300 ng/mL and actually testing serum levels.  (See ‘348 patent, claim 1).  Even if Teva instructs prescribers to “increase the dose” based on an assessment of the tolerability and degree of improvement, that does not necessarily equate with infringement of the patent.

Corcept also alleges:  

"On information and belief, Teva will also instruct prescribers that, in the absence of improvements in Cushing’s syndrome manifestations, prescribers should consider measuring a trough plasma KORLYM level to guide additional titration. On information and belief, Teva will further instruct prescribers that in a study of patients with Cushing’s syndrome, all patients who reached a trough KORLYM concentration of at least 2200 ng/ml had significant clinical improvement based on a centrally-adjudicated, eight-category assessment of clinical response. These instructions will cause the prescribers to perform the steps claimed in the ’348 patent."

These allegations are “on information and belief.”  That is legalese for, we will need discovery to prove that.  That can, theoretically, warrant denial of a motion to dismiss.  That is because a motion to dismiss is technically supposed to assume the plaintiff’s allegations are true, even those on information and belief. 

There are valid reasons why allegations must sometimes be made on information and belief.  The most popular reason is that the information needed to adequately allege infringement is not public, but rather confidential and proprietary.  Alternatively, sometimes the information would be prohibitively expensive to acquire.  Here, Teva has not yet actually marketed the drug, and therefore, whether or not it plans to instruct prescribers in the manner that Corcept alleges is evidently not public.  That said, those instructions are, apparently, not in Teva’s proposed label, and Corcept does not otherwise indicate how and where those instructions will be communicated.  That may be the basis on which Teva move to dismiss the amended complaint.  Thus, it will be important to review Teva’s motion to dismiss to assess whether Corcept has done enough to get to discovery.

Corcept’s new allegations for the new ‘526 patent are along the same lines as the ‘348 patent.  Thus, they will likely rise and fall together with the ‘348 patent.

For the ‘495 patent, Corcept’s amended complaint is fairly similar.  The ‘495 patent is directed to differentially diagnosing two types of Cushing’s syndrome.  In its motion to dismiss, Teva argued that its proposed label for generic Korlym® provides no instructions on differentially diagnosing between two different Cushing’s syndromes.  In response, Corcept’s amended complaint now alleges that Teva will “instruct prescribers to determine whether a patient with Cushing’s syndrome is a candidate for surgery.”  (See Case No. 2:18-3632 (D.N.J)(Dkt. 15)).  From that, Corcept alleges that the ‘495 patent is directed to a method for differentially diagnosing ectopic ACTH syndrome and Cushing’s disease, and doctors will use that method to determine if a patient is eligible for surgery. 

There is an inferential leap in that argument that may not be sufficient to warrant denial of a motion to dismiss.  It is far from clear that determining whether a patient is a candidate for surgery necessarily, or even proximately, leads a doctor to perform the method recited in the ‘495 patent.  This is an undoubtedly smart amendment by Corcept, but once again, we will need to review Teva’s motion to dismiss to determine whether it’s enough for Corcept to get this case to discovery.

For each patent, Corcept claims that some its allegations are “according to Teva’s 1st Notice Letter.”  But it is not clear exactly what Teva’s notice letter actually says.  In the event that Teva files a motion to dismiss the amended complaint, which is more likely than not, then Teva will presumably clarify what its notice letters actually do state.  Indeed, to the extent the complaint cites to those notice letters, the Court can most likely consider them in deciding the motion to dismiss.  That is another way of saying that Corcept will have to have accurately characterized Teva’s notice letter to defeat Teva’s next motion to dismiss.  Right now, that is not in doubt.

In sum, Corcept has clearly added substantive allegations to the complaint to work around Teva’s prior motion to dismiss.  Yet, while Corcept has clearly added meat to the bone, much of those allegations suggest that Corcept does not really know if Teva will infringe these patents.  And it is not clear how Teva would do so outside of its proposed label.  Teva will most likely file another motion to dismiss, and reviewing that motion will be necessary to adequately asses if Corcept can get to discovery.

Can Corcept amend its complaint again if Teva files another motion to dismiss?

Corcept has bought some time by amending its complaint, and pushing off Teva’s motion to dismiss for a month or two.  On that basis alone, the amended complaint is worth something.  But if Teva files another motion to dismiss, can Corcept continue to amend its complaint, and continue to kick the can down the road? 

No, not very likely.  Under Federal Rules of Civil Procedure, a plaintiff, such as Corcept, can amend its complaint once, as a matter of course.  That means, you can amend once, with no questions asked.  After that first time, questions will be asked.  Which means, if Corcept wishes to amend again, it will either need Teva’s consent or it will need permission from the Court.  Teva is obviously unlikely to consent unless there is a benefit to Teva.  That would probably require that Corcept stipulate to something Teva wants—basically, give something away (such as dropping one of the patents from the case.)

As for the Court, to get its permission will likely require a showing of good cause.  That means, if Teva files another motion to dismiss, it will be hard to convince the Court that Corcept should have leave to amend its complaint to add more allegations, given that it already had one chance to do so.  Typically, courts will allow one amended complaint to bolster allegations in response to a motion to dismiss, but not more than once.  In short, you typically get one mulligan, but after that, you need a good reason to get another.  That good reason is typically along the lines of showing that the information you want to add was not previously available.

What if Corcept receives a new patent—can it amend its complaint to add that patent?

On the other hand, if Corcept receives a new patent, the Court may permit Corcept to amend the complaint to add that new patent.  That will likely depend on how mature the case is—how far discovery ahs progressed; how close the case is to trial. 

But a new patent will be something of a moot point.  That is because, even if the new patent is added, it will not likely slow down Teva’s motion to dismiss on the existing patents.  Indeed, Corcept may be better off simply filing a new case with the new patent to avoid having it being swept up into Teva’s pending motion to dismiss.  In short, adding a new patent will not likely slow down the case, and how it is handled will likely be subject to a negotiation between Corcept, Teva and the Court.

What is the status of the pending patent applications?

We previously discussed three pending patent applications, which if issued, may present stronger litigation barriers to Teva’s generic.

The ‘465 application is directed to administering Korlym® with a meal.  The Examiner has repeatedly issued rejections of the claims based upon prior art that purportedly shows taking mifepristone within 2 hours of a meal.  In April 2018, Corcept filed an appeal to the appellate body inside the Patent Office.  (This is not an appeal to the Federal Circuit, but rather an appeal inside the Patent Office itself.)  This could delay issuance of the patent for several more months while that appeal runs its course.

The ‘359 application is directed to drug-drug-interactions (DDI) between Korlym® and CYP3A inhibitors such as ketoconazole.  The Examiner issued a non-final rejection and then a final rejection on June 12, 2018.  In response, on July 18, Corcept filed a Request for Continued Examination, which is a fairly standard response to a final rejection.  It simply means that Corcept has once again tried to convince the Examiner to allow the claims. 

More importantly, Corcept has also submitted three expert declarations to show the purported surprising advantages of the invention.  This is not a guarantee that the patent will be allowed, but expert declarations of this sort can be very useful in convincing the Examiner to overcome obviousness rejections.  That said, the Examiner is not likely to respond, either with an allowance or another rejection, probably for another three to six months, given that the last response took six months.

Similarly, the ‘368 application is also directed to directed to drug-drug-interactions (DDI) between Korlym® and CYP3A inhibitors such as ketoconazole.  This application received its third rejection (non-final) in March 2018.  Corcept responded on June 28 with a substantive response and three expert declarations.  In short, this application thus remains pending, and like the ‘359 application, it is awaiting another response from the Examiner, which is likely three to six months away. 

So, where are we?

Thus, in sum, none of the three pending patent applications for Korlym® are likely to issue imminently.  That, however, is not necessarily terrible news for Corcept.  Right now, Corcept is playing for time.  It needs to keep the pending litigation against Teva alive long enough for one of the new patents to issue, so that those new patents can be added into the case.  Ideally, a new patent issuing from the ‘465, ‘359 or ‘368 applications will be more immune to a motion to dismiss, thus warranting discovery and several more months of litigation. 

This is technically a race between Teva’s motion to dismiss the district court case and issuance of the pending patent applications.  Both of those tracks appear to have a runway of at least six months, if not more.  Briefing on Teva’s upcoming motion to dismiss is likely to take one to two months, and assuming the Judge does not act too quickly, the Court should theoretically take a few months to issue a decision. 

Yet, Corcept likely has more time than that.  Even in the worst case scenario, if Teva successfully dismisses the case before issuance of any new patents, that would mean that Teva could theoretically launch as soon as its ANDA receives FDA approval.  But, Corcept will necessarily file an appeal to the Federal Circuit.  And that appeal will likely take approximately one additional year.  And if Teva were to launch while that appeal was pending, that would be an at-risk launch.  Generics do, at times, launch at-risk, but more so in the biosimilar context than the small-molecule context.