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Supreme Court Does Double-Take, Agrees to Hear Myriad Case

By Marie Powers
Staff Writer

The Supreme Court customarily waits until the Monday following its conference sessions to reveal which cases it has accepted for review, so its decision late Friday to grant cert in two cases with implications for biotech – Association for Molecular Pathology v. Myriad Genetics Inc. and Mutual Pharmaceutical Co. v. Bartlett – was met with surprise and some trepidation.

“The Supreme Court’s decision to grant certiorari creates a cloud of uncertainty over isolated DNA claims that read on human genes, at least until the Court renders its decision,” said Courtenay C. Brinckerhoff, a partner in the Washington, D.C., office of Foley & Lardner LLP. That decision could come before the end of the Court's current term in June 2013, Brinckerhoff told BioWorld Today.

The Myriad case pivots on a challenge to the Salt Lake City biotech’s patents for isolated DNA of the BRCA 1 and BRCA 2 genes used in its diagnostics for breast and ovarian cancer – a class of claims considered the foundation for much of biotech's intellectual property. When Myriad came before the Supremes earlier this year, they bounced it back to the Federal Circuit with instructions to reconsider the case in light of the high court’s Mayo v. Prometheus ruling a week earlier. (See BioWorld Today, March 27, 2012.)

That remand came as little surprise, since the court had similarly instructed the Federal Circuit to revisit Mayo v. Prometheus with an eye to the high court's ruling on business method claims in Bilski v. Kappos. (See BioWorld Today, March 21, 2012.)

But the core of Myriad is comprised of composition claims on isolated DNA, which are much different from the method patents in Prometheus – a distinction the high court may now accept.

"Two previous decisions by the Federal Circuit Court of Appeals confirmed the patentability of our groundbreaking diagnostic test that has helped close to one million people learn about their hereditary cancer risk," Peter Meldrum, Myriad’s president and CEO, said in a statement. "Myriad devoted more than 17 years and $500 million to develop its BRACAnalysis test. The discovery and development of pioneering diagnostics and therapeutics require a huge investment and our U.S. patent system is the engine that drives this innovation. This case has great importance for the hundreds of millions of patients whose lives are saved and enhanced by the life science industry's products."

The BRACAnalysis test detects the presence of the BRCA1 and BRCA2 genetic mutations, which can help determine a patient's risk of breast and ovarian cancer. Women who test positive using the diagnostics have an 82 percent higher risk of developing breast cancer and a 44 percent higher risk of ovarian cancer in their life times than women with a negative finding.

The company’s diagnostic is protected by 24 issued patents and some 500 claims, including 245 composition-of-matter and 240 method claims. If the courts ultimately overturn the 15 challenged claims, the rest of the patent claims would remain in force. The test has strong patent protection through 2018, according to Myriad.

Myriad Contends Fairness

The American Medical Association had asked the Supreme Court to grant certiorari, citing cost of the test and suggesting patents covering genetic sequences interfere with patient diagnosis and treatment. However, Myriad contends multiple health economic studies have affirmed the fairness of the test’s pricing. For example, the company cited an advisory committee report to the Secretary of Health and Human Services, which stated, "the per-unit price of the full-sequenced BRCA test, which often is cited as being priced very high, was actually quite comparable to the price of full-sequenced tests done on colon cancer, for which associated patents are nonexclusively licensed."

The average out-of-pocket cost to a patient is less than $100, according to the company, which also offers a financial assistance program that provides coverage at no charge to low-income patients who lack insurance. Over the past three years, more than 5,000 people have received free BRACAnalysis testing from Myriad, according to the company.

Although RBC Capital Markets analyst Michael J. Yee predicted last week the chance of a Supreme Court re-hearing of Myriad was only 35 percent, he nonetheless suggested in a comment that the high court’s review could be “case-specific, fact-based and claim-specific,” with limited impact on Myriad or the broader biotech industry.

“The case is legally and intellectually significant,” Yee conceded. However, “its actual outcome should have little material impact on MYGN's business because of numerous other existing patents and claims, so this is more likely just headline risk.”

Yee speculated the high court agreed to hear the case to provide a better legal standard in light of the differing logic Federal Circuit judges used to allow the patent eligibility. Thus, a Supreme Court decision in the case possibly would not be construed “in a broad, disruptive manner on patentability of isolated DNA sequences which could impact the biotech/pharma industry,” he wrote.

In addition to the closely watched Myriad case, the high court agreed to consider in Mutual Pharmaceutical Co. v. Bartlett whether the First Circuit Court of Appeals erred when it created a circuit split and held – in conflict with the Supreme Court’s decisions in PLIVA v. Mensing, Riegel v. Medtronic and Cipollone v. Liggett Group – that federal law does not preempt state law design defect claims targeting generic pharmaceutical products because the conflict between such claims and federal laws governing generic pharmaceutical design allegedly can be avoided if generic pharmaceuticals companies simply stop making their products.

The Supreme Court ruled 5-4 last year in Pliva v. Mensing that generic drugmakers can't be held liable under state tort law for "failure to warn," even if they know their label is inadequate. That decision was based on a federal law requiring generics to have the same label as the brand drug. (See BioWorld Today, April 23, 2012.)