A USA judge's ruling on Monday invalidating Allergan Plc's patents on its blockbuster $1.5 billion dry-eye medicine, Restasis, has cast doubt on the company's novel strategy to enlist a Native American tribe to help shield those patents from challenge by generic drugmakers, legal experts said.In a deal announced last month, Allergan transferred the Restasis patents to NY state's Saint Regis Mohawk Tribe, claiming the group's status as a sovereign nation meant the patents could not be reviewed by the US patent office.Allergan said the move was justified because the same patents were already being reviewed in federal court, but critics said it was a cynical attempt to prolong the company's monopoly on Restasis.The federal judge, William Bryson, expressed concerns about the legitimacy of the tribal transfer, calling it a ploy by Allergan to "rent" the tribe's sovereign immunity. In the 135 page opinion, Judge Bryson held as invalid and obvious all 13 asserted claims (representative of 113 claims) in 4 Orange Book Listed patents covering the drug Restasis®. Mylan ( MYL ) and Teva Pharmaceutical ( TEVA ) are among those working on generic versions of the drug.
Robert Baily, chief legal officer, Allergan, said: "We are disappointed by the Federal District Court's decision on the Restasis patents and we are carefully reviewing the decision and are considering all options". For purposes of the judgment, the Court allowed the Indian Tribe to join as co-plaintiff, without finding the patent assignment to them to be valid.
Allergan has been under fire since it sold its eye drop medication patents to Saint Regis Mohawk Tribe - a Native American group based in a rural region between Canada and NY - for $13.75m and potential annual royalties of around $15m. The tribe did not claim sovereign immunity in that case.
The patent office is still reviewing the case, including the Mohawks' argument that the patents are protected by the tribe's sovereign immunity.
Bryson said he believed Allergan's deal with the tribe was a "ploy" and that he had "serious concerns" about its legitimacy.
For the St. Regis Mohawk Tribe, it could mean big hurdles, or even the end, of what tribal leaders hoped would be a lucrative new business for the Akwesasne economy - protecting patents for a range of companies.
Allergan's arrangement with the Mohawk tribe had been greeted with outrage by members of Congress and consumer groups, who said it was just the latest tactic by drugmakers to foil generic competitors and protect their profits. The measure was aimed to ward off a patent challenge different from the federal court case - that is underway in an administrative proceeding before a unit of the United States Patent and Trademark Office.
"We couldn't be more pleased with today's federal court ruling invalidating the Restasis patents".
David Maris, an analyst for Wells Fargo, estimated in a note to investors Monday that a generic alternative would likely not enter the market until 2019.