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by Zachary Silbersher

Will Bristol Myers’ patent gamble for Karuna’s KarXT pay off?

Zachary Silbersher

Bristol Myers Squibb recently announced a deal to buy Karuna Therapeutics for $14 billion.  Bristol Myers has touted the deal as accelerating the company’s expansion into neuroscience.  Karuna’s lead asset, KarXT, is an antipsychotic that is a combination of two prior drugs, xanomeline and trospium.  Analysts have reported that KarXT could surpass $6 billion in annual sales.  However, that may depend on whether Karuna has protected KarXT with sufficient intellectual property.  Does KarXT have strong enough patent protection to ward off generics for long enough to make Bristol Myers’ gamble pay off?

The 2030 Patents

KarXT does not yet have FDA approval.  Karuna’s NDA for KarXT for the treatment of schizophrenia in adults has been accepted by the FDA.  The drug’s anticipated launch date is approximately September 2024.  Accordingly, Karuna has not yet listed any patents covering KarXT in the Orange Book.  That said, to date, Karuna has acquired patents protecting KarXT that generally fall into three groups: -- (i) formulation patents; (ii) method-of-use patents; and (iii) fixed dose combination patents. 

The first two groups of patents (formulation and method-of-use) are scheduled to expire in approximately 2030.  These patents generally claim dosage amounts and dosage sequences for treating certain conditions.  Assuming they track the language of KarXT’s eventual label, they are likely to be infringed.  Their validity will undoubtedly be challenged by generics, but the patents are not likely as strong from a validity perspective as composition-of-matter patents.  Nevertheless, given the timing of KarXT’s likely FDA approval, the strength of these first two groups of patents—both with respect to infringement and validity—may not have a material impact on warding off generic entry. 

Assuming KarXT is approved in 2024, then prospective generics are likely to be precluded from filing ANDAs until 2027 or 2028.  Presuming they file Paragraph IV statements against some of KarXT’s Orange Book patents, a 30 month stay combined with the general timeline of ensuing litigation could likely delay resolution of those suits for another three to four years.  The litigations themselves are likely to take at least two to three years, and another year will likely be required for appeals.  As a result, KarXT’s FDA exclusivity followed by anticipated patent litigation is likely to keep generics off the market until after expiration of the first two groups of patents. 

The actual length of KarXT’s FDA exclusivity could further protect KarXT from generics through expiration of the formulation and method-of-use patents.  Karuna has indicated that KarXT is likely to receive NCE (New Chemical Entity) exclusivity, which would be for five years.  NCE exclusivity is typically granted to new active moieties, and KarXT’s two ingredients, xanomeline and trospium, are not new drugs.  Yet, Karuna has indicated that because xanomeline has not previously received FDA approval, KarXT may therefore be eligible for NCE exclusivity.

Yet, even if KarXT receives only three years of FDA-exclusivity, the difference may not be that material.  If KarXT receives FDA approval in September 2024 along with three years of exclusivity, then generics will be allowed to file ANDAs in September 2027.  By contrast, if KarXT receives NCE (5 years) exclusivity, generics will be allowed to file ANDAs in September 2028.  (For five year NCE exclusivity, generics can file ANDAs one year before the exclusivity period expires.). The patent litigations are likely to resolve at approximately the same time, give or take a year.

Karuna may also be able to extend the lifetime of its first or second group of patents.  Although these patents currently expire around 2030, the lifetime of these patents could be extended by Patent Term Extension (PTE), which could yield an additional 5 years granted by the FDA due to delays with approval.  In addition, pediatric extensions could add another six months. 

The 2040 Patents

Karuna’s third group of patents, which are the fixed dose combination or co-formulation patents, expire closer to 2039.  (Their expiration dates could also eventually benefit from either PTE or pediatric extensions.)  Given their expiration days, these patents likely matter most to handicapping whether KarXT can be free from generic competition as far as 2040.  It is this group of patents that Bristol Meyers is presumably gambling on.  

Karuna has indicated that it currently has four fixed dose combination patents issued in the United states.  These patents appear to include U.S. Patent Nos. 10,925,832; 10,933,020; 11,452,692 and 11,471,413.

These patents are generally directed to treating patients with a pharmaceutical composition comprising xanomeline and trospium.  However, the fundamental “invention” of these patents is not the combination of the two drugs.  Rather, during examination of these patents before the Patent Office, Karuna acknowledged that the prior art already taught combining these two drugs.  Specifically, the Patent Office cited to U.S. Patent Application No. 2017/0112820 to Elenko, which already patented combining the two drugs.  Indeed, the Elenko prior art is one of Karuna’s formulation patents that expires in 2030 (U.S. Patent No. 10,238,643).

Instead, Karuna argued to the Patent Office that the invention for the fixed dose patents is directed to formulating the drugs as populations of beads.  The patent claims cover various aspects of this combined microbead structure, including specific sizes of the beads, weight ratios, dosage amounts, and so forth.  Karuna claimed to have discovered unexpected benefits resulting from formulating the two drugs as specific beads structures.  In particular, the bead structure purportedly revealed that the drugs would dissolve at relatively the same rate, and as a result of that, side effects associated with both drugs dramatically decreased.

Karuna relied upon Phase 1 and Phase 2 studies to show this purportedly surprising discovery.  For instance, Phase 1 data suggested that salivary hypersecretion was roughly 20% to 25% higher in the xanomeline and trospium arm compared to the KarXT arm; excessive sweating was roughly 10% to 15% higher in the xanomeline and trospium arm compared to the KarXT arm; and diarrhea was almost 6% higher in the xanomeline and trospium arm.  (See U.S. Patent Application No. 16/585,532, Amendment, Dec. 22, 2020 at 12-13).

Karuna also submitted Phase 2 data that also purported to show side effects were dramatically higher in patients taking xanomeline compared to KarXT.  The Phase 2 data also showed side effects were higher in patients taking KarXT compared to placebo.  Some of the data submitted by Karuna to the Patent Office is depicted below.  (See U.S. Patent Application No. 16/585,532, Amendment, Dec. 22, 2020 at 12-13).

Risks for the 2040 Patents

In the event that generics file ANDAs for KarXT, they are likely to file Paragraph IV certifications against the fixed dose combination patents.  The generics are likely to argue during ensuing patent litigation that the patents should be invalidated as obvious in view of the prior art.  In particular, the prior art (Elenko) already taught multiple aspects of the fixed dose combination patents.  Indeed, during examination, Karuna admitted that the prior art already taught: “xanomeline and trospium chloride in a single dosage, including details of dosage amounts, side effects reduction, oral formulation, possibilities for drug release, and lists of exemplaray excipients.”  (See U.S. Patent Application No. 16/585,532, Amendment, Dec. 22, 2020 at 8) (citations omitted).

Given this, generics will claim that bead technology was already known by persons of skill in the art to formulate and control dissolution rates of active ingredients.  Indeed, the Examiner cited at least one prior art reference teaching bead technology (U.S. Patent Application Publication No. 2009/0017111 by van den Heuvel).  This van den Heuvel reference was published nearly 10 years before Karuna applied for its fixed dose combination patents.

The generics will next contend that it was obvious to use known technology, namely, microbead structures, to formulate a dual drug combination to control dissolution rates.  They will point to caselaw holding that optimizing known technology—i.e., bead sizes, weight ratios, dosages—is not generally patentable if the optimization results in a matter of degree versus a matter of kind.  The devil will be in the details, and it will be a battle of the experts.  But even at a high level, the invalidity arguments for these patents is readily apparent.

Another risk relates to the data submitted by Karuna during examination of the fixed dose patents (and depicted above.). Patent applications are examined ex parte.  The Patent Office does not typically vet or challenge data submitted by patent applicants.  Yet, during Hatch Waxman litigation, that is exactly what the generics will do.  Here, they are likely to argue that Karuna’s data does not necessarily support its conclusion.  The prior art already taught dosing xanomeline and trospium together.  Karuna claimed to the Patent Office that its purportedly novel bead structure reduced the side of effects of simply dosing the drugs together.  Yet, the data does not appear to compare KarTX to xanomeline and trospium dosed together, but rather against xanomeline alone or against placebo alone.  This is a matter more suited for expert opinion, and requires more analysis, but even on the face of the data submitted by Karuna, the fixed dose patents face invalidity risk.

Another risk is on infringement.  Some of the patent claims are very narrow.  For instance, one of the independent claims from the ‘832 patent requires dissolution rates of 95% within 45 minutes as well as the requirement that, when KarXT is administered to a patient “for at least 7 days at 20 mg trospium twice daily,” that will yield “a mean Cmax of trospium at 7850+/-3360 pg/mL and a mean AUC0-12 of 41900+/-15500 hr pg/mL.”  While claims that are this narrow are likely to be insulated from invalidity challenges like those discussed above, it can nevertheless be very difficult to show these limitations are infringed by a given drug, especially if this type of data is not included somehow in the label.

Despite these risks, there remain a few known unknowns that make it difficult to fully handicap Karuna’s chances of protecting against generic entry until 2040.  First, KarXT has not yet been approved by the FDA.  We do not yet know what the label will precisely say, and therefore, assessing infringement of select patents against the pending or prospective label language is limited at this time.   

In addition, Karuna is likely to acquire more patents covering KarXT in the future.  Karuna currently has at least two additional pending patent applications directed to the fixed dose combination technology.  These include U.S. Patent Application Nos. 17/822,872 and 18/392,891.  These patents will also expire around 2039. 

More patent coverage is generally better for brands attempting to delay generic entry.  Yet, these pending applications are likely to be more narrow than earlier patents within the same family.  That may bolster their strength against invalidity challenges, but simultaneously make it more difficult to prove infringement.  Again, the devil will be in the details.

In sum, Karuna appears to have devoted commendable resources to building a portfolio of numerous patents around KarXT.  Those patents are likely protect against generic competition until at leaset the early 2030’s.  Yet, whether those patents can keep out generics until 2040 remains, at this stage, a gamble.