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BGD attorney on pharmaceutical litigation
Posted in Litigation

A BGD attorney was recently interviewed for an article in BioPharm Insight on pharmaceutical litigation. The full article is reprinted with permission below.

Amylin Pharmaceuticals files against Eli Lilly

By Sasha B. Coffiner Amylin

Pharmaceuticals (NASDAQ:AMLN) recently-filed litigation against its diabetes commercial partner Eli Lilly(NYSE:LLY) is likely to be resolved in favor of Lilly under the terms of the agreement, attorneys told this new service. However, they added that the dispute underscores that the partnership between the two parties is at risk.

Lilly declined to comment for this article.

Amylin did not respond to a request for comment. Amylin filed a lawsuit against Eli Lilly on 16 May 2011 in federal district court for the Southern District of California, alleging that Lilly is engaging in anti-competitive activity and thereby breaching its strategic alliance agreements with Amylin to maximize its commercialization of exenatide.

Lilly and Amylin had entered into an alliance in 2002, for the global development and commercialization of exenatide, currently marketed as Byetta for Type II diabetes. In addition, Bydureon, a second, longer-acting exenatide product, is currently under review by the FDA. In its complaint, which was filed under seal, Amylin is seeking, among other forms of relief, a permanent and preliminary injunction to prevent Lilly from proceeding with its plans to use the same commercial sales force to sell exenatide and Boehringer Ingelheim’s linagliptin.

In January Lilly and Boehringer announced a global agreement to jointly develop and commercialize up to five mid- and late-stage development diabetes compounds, including Boehringer's two oral diabetes agents (linagliptin and BI10773) as well as Lilly's two basal insulin analogues (LY2605541 and LY2963016), with an option on Lilly's anti-TGF-beta monoclonal antibody. Lilly's once weekly GLP-1 LY2189265 was not included in the arrangement. Based on their experience, a corporate attorney at Bingham Greenebaum Doll said Lilly is "very astute" in entering into these types of agreements and it is unlikely that the agreement contains language that would not have allowed Lilly to pursue any other options in diabetes.

Typically alliances and partnerships do not have this type of duty owed under the terms of the agreements in place, he added. In addition, they noted that Lilly has a strong public policy argument before the court, based on the clinical unmet need in the space. Thus, the attorney added that resolution of the contract dispute likely favors Lilly.

Most of the time, this type of agreement contains only “very narrowly written” exclusivity provisions, said Wayne Miller, a corporate partner with the Compliance Law Group. The court is unlikely to find in this situation that it is impossible for the same sales force to promote both products, given that they differ in nature, formulation and method of administration, he added.

These types of agreements usually do not specify inability to work with other parties across an entire therapeutic indication added Tini Thomas, a corporate and intellectual property attorney in private practice. For this reason, “I believe Lilly will have the upper hand in resolving this dispute,” Thomas added, explaining that the agreement is unlikely to have a strong exclusivity or non-compete clause. She noted that Amylin has made no reference of such a provision in its public statements since the litigation was filed.

Amylin likely filed the lawsuit under both federal law, as well as pursuant to California Business and Professions Code 17-200, which governs unfair competition under California state law, noted Thomas Vidal, a corporate partner at Abrams Garfinkel Margolis and Bergson. Amylin is seeking injunctive relief, and the standard for obtaining this type of injunctive relief is “very high,” he noted, adding that Amylin is unlikely to obtain injunctive relief on these grounds.

Yet, Edward Osei, an assistant professor of law at Widener University, who also formerly worked at AstraZeneca and Bristol Myers Squibb, said that although one product is injectable and the other is oral, this still may pose a concern under the agreement because both products serve the same patient population with the same prescribing physicians.

Gary Hood, a partner at Polsinelli Shughart, said that Amylin’s litigation seems to focus on loyalty and splitting of the sales force, such that the case is likely to resolve without further disrupting the partnership.

Lilly will likely aim to keep the partnership in place said Fowler, but also while working on competing diabetes drugs.

Yet, it is certainly possible that Lilly’s actions will result in cutting off the relationship between Amylin and Lilly, as this type of litigation could “certainly” lead to dissolution of the partnership, Miller noted. Lilly may look to divide its sales rep forces into two distinct managerial teams to resolve the situation, added Osei. He thought that Lilly is unlikely to terminate the partnership in this type of situation, but that Amylin may seek to look for a more dedicated partner.

This news service has previously reported that the Amylin-Lilly partnership may be at risk due to Lilly’s collaboration with Boehringer Ingelheim. The existing Amylin/Lilly contract states that if the products do not achieve a designated annual sales amount after the completion of the fourth full calendar year following its launch, either company may have the right to request a modification of the financial terms of the collaboration and in certain instances to require that the other company choose to buy or sell its financial interest in the collaboration.

Byetta has been on the market for five years but only generated worldwide sales of USD 168.8m in 3Q10, an 18% drop from 3Q09, due to competitive pressures in the US and Germany. US sales decreased 23% to USD 132.4m for the quarter, according to public information.

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