A U.S. Court of Appeals affirmation of a lower court ruling requiring the FDA to grant Eagle Pharmaceuticals Inc.'s bendamustine infusion product, Bendeka, seven years of orphan drug exclusivity appears to resolve a key piece of uncertainty that had troubled Eagle and others in similar circumstances. Barring legislative changes, the decision sets a precedent locking the regulator into granting seven years of exclusivity for any drug it designates as an orphan product during development, even if the new drug doesn’t demonstrate an improvement over what’s already on the market.

In a statement sent to BioWorld, Eagle said, "We are pleased with the court’s decision to uphold orphan drug exclusivity for Bendeka. We will continue investing in our pipeline to develop innovative medicines that result in meaningful improvements in patients' lives."

The case revolved around the FDA's initial refusal to grant Eagle the market exclusivity it expected following the regulator's December 2015 approval for Bendeka to treat chronic lymphocytic leukemia and non-Hodgkin lymphoma. The drug was designated as an orphan drug by the agency in July 2014. Though similar to a previously approved medicine, Teva Pharmaceutical Industries Ltd.'s Treanda, the FDA accepted Eagle’s hypothesis for Bendeka’s clinical superiority in granting the orphan status in July 2014.

In its March 13 decision, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a decision originally issued by the U.S. District Court for the District of Columbia on June 8, 2018, finding that "the plain language" of a portion of the Orphan Drug Act (ODA) "unambiguously required the FDA to grant marketing exclusivity when it had designated an orphan drug and approved that drug for marketing."

"The district court rejected the FDA’s concern that interpreting the ODA in such a way could result in 'serial exclusivity' – allowing drug manufactures to obtain successive periods of exclusivity by 'simply tweak[ing] their formulation for that drug and resubmit[ting] applications for designation and approval' after the initial seven-year period expires – holding that 'this result would only occur if the FDA permitted it to happen.'," the Court of Appeals held.

The Court of Appeals further dismissed an argument that the FDA needed to make a new determination on whether or not to grant Eagle's Bendeka exclusivity due to amendments to the ODA in 2017 because the argument was raised for the first time on appeal. "Based on its order, which we uphold, Eagle was automatically entitled to a period of exclusivity upon being approved," the court wrote.

In a dissenting opinion, Senior Circuit Judge Stephen Williams said that the "majority’s interpretation of the statute runs counter to the best reading of the congressional language" and "fundamentally upsets" the basic economic bargain that Congress set up in the ODA to "incentivize medical research into rare diseases that might otherwise not attract much investment."

Bendeka is one of three approved products in Eagle's portfolio and is marketed by Teva through its subsidiary, Cephalon Inc. According to Eagle's most recent 10-K filing, under the scope of its current exclusivity standing, no bendamustine product may launch in the U.S until Dec. 7, 2022, unless it is clinically superior to Bendeka. Prior to the decision, generic versions of Treanda were poised to enter the market in November 2019.

Eagle's shares (NASDAQ:EGRX) fell 6% to close at $36.95 on Monday.

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