Agreeing to an en banc hearing, the Federal Circuit will rethink the "on-sale bar" a three-judge panel expanded earlier this year in striking down two patents protecting The Medicines Co.'s (MDCO) anticoagulant drug Angiomax (bivalirudin).

In granting the rehearing, the Federal Circuit invited the Department of Justice and other drugmakers to weigh in on what constitutes a commercial sale under the on-sale bar.

The appellate court specifically asked MDCO, Hospira Inc., which challenged the patents, and those filing friend-of-court briefs to focus on whether the manufacturing contract MDCO had with Ben Venue Laboratories more than a year before the patents were filed qualified as a commercial sale that would trigger the on-sale bar.

The panel ruled in July that the contract – to produce three batches of bivalirudin as part of an experimental "optimization study" and to prove to the FDA that the drug met the agency's approved specifications for finished bivalirudin – was a commercial sale. MDCO "paid Ben Venue for performing services that resulted in the patented product-by-process, and thus a 'sale' of services occurred," the panel maintained. (See BioWorld Today, July 7, 2015.)

The process claimed in the patents filed in 2008 was a solution to a problem Parsippany, N.J.-based MDCO had experienced a few years earlier when Ben Venue produced a batch of bivalirudin with levels of Asp9-bivalirudin impurity exceeding the FDA's approved maximum of 1.5 percent. A consultant MDCO hired discovered that adding a pH-adjusting solution during the compounding process would minimize the impurity to less than 0.6 percent.

Although MDCO had validated the process in a previous study, it identified several opportunities for further optimization, which led to the optimization study with Ben Venue. The study batches, valued at more than $10 million each, were marked with a commercial product code and a customer lot number. While one batch was "released" to MDCO for commercial and clinical packaging, it remained at Ben Venue pending shipping instructions. Release of the other two batches was pending validation.

Although a lower court found that the claimed invention was ready for patenting at the time of the manufacturing invoices, it upheld the patents, saying the Ben Venue contract wasn't a commercial sale because the manufacturing was primarily for an experimental purpose. MDCO maintained that the invoices didn't meet the on-sale bar because the company hadn't reduced the invention to practice at the time and there were no drawings or written descriptions to enable a person skilled in the art to practice the invention.

The Federal Circuit panel disagreed. Because the invention was sold via the manufacturing invoices, the batches produced by Ben Venue reduced the claims to practice, making the invention ready for patenting, it said. In expanding the on-sale bar, the panel allowed for possible experimental use exceptions. If an inventor is unaware that an invention meets the intended purpose and continues to experiment, the experimental use defense may be valid. The on-sale bar also wouldn't start if "an evaluation period is reasonably needed to determine if the invention will serve its intended purpose," the panel said.

The two patents invalidated by the panel wouldn't have expired until 2028, and a pediatric exclusivity would have protected Angiomax into 2029, according to MDCO. However, a few months prior to the panel's ruling, the company settled separate litigation involving the same patents, allowing a subsidiary of Sun Pharmaceutical Industries Ltd. to market a generic bivalirudin in the U.S. by mid-2019. And a week after the appellate panel's ruling, MDCO announced an agreement with Sandoz Inc. for the distribution of an authorized generic of Angiomax in the U.S.

MDCO CEO Clive Meanwell welcomed the news of the en banc. The company is considering all its options with respect to Hospira and other generic drugmakers, he said. Last year, MDCO reported net sales of $635.7 million for Angiomax, with 94 percent of those sales – about $599.5 million – coming from the U.S.

EXPLANATION NEEDED, PTAB TOLD

In a separate case this week, the Federal Circuit bucked conventional wisdom that it's easier to invalidate patents through the inter partes review (IPR) process than it is through the courts when it cracked open the door to striking down a patent the Patent Trial and Appeal Board (PTAB) upheld following an IPR. PTAB ruled that Ariosa Diagnostics Inc. didn't meet its burden of proof in challenging the obviousness of several method claims pertaining to Redwood City, Calif.-based Verinata Health Inc.'s patent for noninvasive prenatal testing for fetal chromosomal abnormalities.

Ariosa, of San Jose, Calif., failed to present a synthesis of how to put together the elements from three separate references to establish obviousness, and PTAB declined to connect the dots for the company. "A brief must make all arguments accessible to the judges, rather than ask them to play archaeologist with the record," the board said, quoting from a previous Federal Circuit decision.

When Ariosa replied with a new exhibit and accompanying expert declaration, PTAB refused to give it weight, saying in a footnote that a reply can't be used to provide new evidence that should have been presented earlier.

Not so fast, the Federal Circuit said, as it handed the case back to the board and asked it to better explain why it rejected the exhibit proffered by Ariosa. But the appellate court refused to go as far as striking the patent itself.

"Given the complexity of this area, and how seemingly small differences might be significant, we will not undertake to determine whether a proper assessment of Exhibit 1010 should lead to a reassessment of the explanatory gap," the court said. "The board is in a better position to do so."

Use of the IPR process for drug patents has been criticized, due in part to what some see as more lax standards of evidence required by PTAB as opposed to what the courts require.