Judge invalidates Allergan's key patents for dry-eye treatment Restasis

Brent Saunders

Allergan PLC shares dropped 5.4% in extremely heavy afternoon trade Monday, after a Texas district court judge ruled against the company in a patent lawsuit regarding the company's key billion-dollar, dry-eye medication Restasis.

Allergan had previously made an unorthodox agreement with a NY state-based American Indian tribe in order to protect Restasis patents from challenges made through the U.S. Patent and Trade Office's inter partes review process, which is separate from any court decisions.

Judge William Bryson issued the ruling in federal court in Marshall, Texas, in a longstanding dispute between Allergan and generic drug-makers Mylan NV, Teva Pharmaceutical Industries Ltd., and Akorn, Inc. For purposes of the judgment, the Court allowed the Indian Tribe to join as co-plaintiff, without finding the patent assignment to them to be valid. The 135-page decision found that Allergan's patent protection for the drug ended in 2014, and that "Allergan is not entitled to renewed patent rights for Restasis in the form of the second wave of patent protection". 8,633,162 and 8,642,556, are listed in the Orange Book for Restasis and expire on August 27, 2024.

The deal has faced criticism from senators and drug manufacturers who claimed the move was anti-competitive. The tribe and Allergan argue that the patents are not subject to the patent office's review because of the tribe's sovereign immunity.

In addition, "sovereign immunity should not be treated as a monetizable commodity", Bryson said. It was in federal court, where Allergan had said at the time of the deal it wouldn't try to use the Mohawks' sovereign immunity.

Allergan said in a statement on Tuesday that its deal with the tribe has helped raised awareness about the need to reform the PTAB process, which the company said does not provide due process to patent owners.

It said that Allergan had "invoked the benefits of the patent system", but refused to accept the limitations of those benefits.

The St. Regis Mohawk Tribe's blockbuster deal to protect drug patents in exchange for millions of dollars has hit a roadblock. "We are carefully reviewing the decision and are considering all options", Allergan chief legal officer Robert Bailey said.

Allergan noted that it will appeal the ruling.

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