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Eli Lilly & Co. (NYSE:LLY) v. Teva Pharms. (NYSE:TEVA) USA, Inc., No. 2009–1071 (Fed. Cir. 2009)

Under the Hatch-Waxman Act, final FDA approval of an ANDA is automatically stayed for thirty months when a patent owner files suit for patent infringement within 45 days of receiving a Paragraph IV notice letter. The purpose of the stay is to allow the parties to litigate the patent infringement claims while the ANDA filer pursues FDA approval of its generic drug. Pursuant to 21 U.S.C. § 355(j)(5)(NYSE:B)(iii), a district court may shorten or lengthen the thirty–month stay if "either party to the action failed to reasonably cooperate in expediting the action."

Tuesday, in a 2–1 decision authored by Judge Rader and joined by Chief Judge Michel, the Federal Circuit affirmed a district court order extending the thirty-month stay of FDA approval of Teva's ANDA for generic Evista (raloxifine hydrochloride) tablets. Eli Lilly markets Evista for the treatment and prevention of postmenopausal osteoporosis. Evista accounted for $1.075 billion in sales in 2008.

Thirteen patents are currently listed in the Orange Book for Evista, with expiration dates ranging from 2012 to 2017. On May 16, 2006, Teva notified Lilly of its Paragraph IV certifications on at least some of the patents. Lilly sued Teva on June 29, 2006, alleging that Teva's ANDA infringed four method patents. Thus, the 30–month stay was originally set to expire on November 16, 2008. The district court scheduled trial to begin on March 9, 2009.

In February 2007, Lilly amended its complaint to assert that Teva infringed three more patents--U.S. Patent Nos. 6,458,811; 6,797,719; and 6,894,064--covering raloxifene particle size and formulations. On July 8, 2008, Teva amended its ANDA to include a new particle-size measuring methodology for the raloxifene in its generic drug product. Shortly thereafter, Lilly filed a motion to extend the thirty-month stay, arguing that Teva

"failed to reasonably cooperate in expediting the action . . . as evidenced by Teva's last-minute alteration of its proposed drug product and its multiple delays in producing critical discovery . . . [which have] adversely affected Lilly's infringement case and trial preparation."

The district court granted Lilly's motion and extended the thirty-month stay by about four months, to March 9, 2009. In an order dated October 29, 2008, the court stated:

In light of the fact that Teva has recast its product more than eighteen months after it provided the original sample to Lilly and only eight months before trial is set to commence, we find that, in preparation for trial, Lilly is entitled to have sufficient opportunity to identify the nature and composition of the raloxifene product as Teva intends for it to be sold.

In its decision Tuesday, the Federal Circuit concluded that the district court did not abuse its discretion:

In making this determination, the record contained sufficient evidence, not based on clearly erroneous factual findings, upon which the district court rationally based its decision. The court relied on the evidence in the record that Teva altered its proposed generic raloxifene hydrochloride tablets late in the litigation. Specifically, Teva changed the particle size manufacturing specification of its active pharmaceutical ingredient and the method of measuring the particle size. Teva then delivered its changed samples to Lilly past the court’s August 18, 2008, discovery deadline.

Judge Prost dissented, writing that "the district court never made any finding related to the statutory standard, i.e., whether Teva reasonably cooperated in expediting the action." Moreover, she stated that "the consequences of the majority opinion are of particular importance here" because "this court has not previously provided any guidance to the district courts as to what qualifies as a 'failure to reasonably cooperate in expediting the action.'" She concluded,

"To affirm in this case is to effectively eliminate the statutorily required finding, and to prematurely terminate the development of appropriate standards governing modification under 21 U.S.C. § 355(j)(5)(B)(iii)."

According to the FDA website, Teva's ANDA for generic Evista is tentatively approved. As a result of Tuesday's decision, final approval of Teva's remains stayed until March 9, 2009, when trial is set to begin in the Southern District of Indiana. According to the district court's order of October 29, 2008, Teva previously "informed Lilly that it will launch its generic raloxifene hydrochloride upon expiration of the statutory stay."

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Source: Federal Circuit Affirms Extension of Stay Against Teva's Generic Evista