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Baxalta Inc. v. Genentech, Inc.

United States District Court, D. Delaware

August 7, 2018


          OPINION & ORDER

          Honorable Timothy B. Dyk United States Circuit Judge.

         On May 4, 2017, Baxalta Inc. and Baxalta GmbH (together, "Baxalta") brought suit against Genentech, Inc. and Chugai Pharmaceutical Co., Ltd., alleging infringement of U.S. Patent No. 7, 033, 590 ("the '590 patent") by the manufacture, use, sale, offer to sell, and importation of an antibody used to treat hemophilia A and known as emicizumab or ACE910, marketed under the brand name Hemlibra. On December 14, 2017, Baxalta moved for a preliminary injunction barring further sales or offers to sell Hemlibra in the United States, with exceptions for certain patients. In addition to two rounds of briefing, the Court held an evidentiary hearing on Baxalta's motion on June 13 and 14, 2018, and heard oral argument on July 2, 2018. Baxalta having failed to meet its burden for showing the propriety of preliminary injunctive relief, the motion for a preliminary injunction is DENIED. This opinion constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).


         I. Procedural History

         Baxalta filed its complaint on May 4, 2017, alleging infringement of the '590 patent. Compl. ¶¶ 37-51, ECF No. 1. Genentech answered on June 30, denying Baxalta's allegations and counterclaiming for declaratory judgment of noninfringement and invalidity. Answer & Countercl. ¶¶ 37-51, 120-49, ECF No. 9. With the Court's leave, Baxalta has since amended its complaint to add allegations of willfulness. 1st Am. Compl. ¶¶ 37-44, 60-65, ECF No. 239.

         On December 14, 2017, Baxalta moved for a preliminary injunction against Genentech (but not Chugai).[1] Mot. Prelim. Inj. 2, ECF No. 41; Prop. Prelim. Inj. Order 1, ECF No. 42-1. Although Baxalta initially asserted seven claims of the '590 patent, Bax. Mem., at v, ECF No. 42, it later filed notice that it would assert only claim 1 for purposes of this motion, Notice 1, ECF No. 106.

         On May 4, 2018, this action was reassigned to the undersigned, sitting by designation. Genentech thereafter filed its opposition to Baxalta's motion, Gen. Mem., ECF No. 154, and Baxalta filed its reply, Bax. Reply, ECF No. 180. A group of potentially affected hemophilia patients, Patients for Access to Advanced Hemophilia Therapy (PAAHT), filed a brief as amicus curiae in opposition to Baxalta's motion. Amicus Br., ECF No. 190. Finally, the parties filed supplemental letters concerning the claim-construction issues bearing on Baxalta's motion. Gen. Ltr., ECF No. 201; Bax. Ltr., ECF No. 202.

         The Court held a two-day evidentiary hearing on Baxalta's motion on June 13 and 14, 2018. See Tr., ECF Nos. 214-15. The Court heard oral argument on the motion on July 2, 2018. See Oral Arg. Tr., ECF No. 229. The parties then submitted proposed findings of fact and conclusions of law, as well as replies thereto. See Bax. Prop. F. & C, ECF No. 230; Gen. Prop. F. & C, ECF No. 232; Bax. Reply F. & C, ECF No. 242; Gen. Reply F. & C, ECF No. 244. The parties submitted a list of exhibits to be included in the preliminary-inunction record and their objections thereto. See Joint Ltr., ECF No. 245.

         II. Treating Hemophilia A

         The body stops bleeding by relying on blood coagulation, also known as clotting, which is accomplished through a cascade of reactions between proteins, including those proteins known as clotting factors. See Aledort Decl. ¶¶ 13-14, ECF No. 46; Sheehan Decl. ¶ 35, ECF No. 111. Several of these factors are identified by Roman numerals, e.g., Factor I or Factor IX, and when activated are identified with an appended a, e.g., Factor IXa. Aledort Decl. ¶ 13. The relevant steps in this clotting cascade here involve the coming together of Factor Villa and Factor IXa. See Id. These two activated factors form a complex, which in turn activates Factor X. See id.; Sheehan Decl. ¶ 36. Several steps later, the cascade yields a protein known as fibrin, and a blood clot is formed. See Aledort Decl. ¶ 13; Sheehan Decl. ¶¶ 37-39.

         Hemophilia A is a genetic disorder in which Factor VIII is reduced, defective, or absent. See Aledort Decl. ¶ 14; Sheehan Decl. ¶ 42. This amounts to a roadblock in the clotting cascade, and hemophilia A patients therefore suffer from a reduced ability to form quick and effective blood clots. Aledort Decl. ¶ 14; Sheehan Decl. ¶ 42. Hemophilia A can be classified as mild, moderate, or severe based on the level of Factor VIII activity. See Sheehan Decl. ¶ 43.

         A common treatment for hemophilia A patients is infusion with a Factor VIII replacement, either natural or synthetic. Aledort Decl. ¶ 14; Callaghan Decl. ¶ 15, ECF No. 109. Factor VIII replacement therapy can be administered either as an ongoing prophylactic therapy and/or on-demand to treat bleeding episodes. See Tr. 205:24-206:13. Baxalta's Factor VIII therapies include two products at issue here: Advate and Adynovate. See Bakewell Decl. ¶ 33, ECF No. 43; Tr. 299:8-14.

         However, up to 35% of patients with hemophilia A develop Factor VIII inhibitors, antibodies produced by the immune system that block the effect of the Factor VIII replacement. See Tr. 163:21-22; Aledort Decl. ¶ 15; Young Decl. ¶ 20, ECF No. 110. These are known as inhibitor patients. See, e.g., Aledort Decl. ¶ 16. Prior to the introduction of Hemlibra, there had been two approaches to treatment of inhibitor patients. Somewhere between 40% and 70% of inhibitor patients (who cannot receive Factor VIII therapy) are able to build up a tolerance for Factor VIII therapy through routine injection of the factor in a therapy known as immune tolerance induction (ITI). See Aledort Decl. ¶ 16; Young Decl. ¶¶ 22-23. ITI requires daily infusion of Factor VIII for months or even years before it is clear whether it has been successful. Callaghan Decl. ¶ 16; Young Decl. ¶ 22. If inhibitor patients are unable to achieve such a tolerance, they are unable to receive Factor VIII therapies. See Callaghan Decl. ¶ 16; Young Decl. ¶ 23.

         The second method of treatment for inhibitor patients involves bypassing agents (BPAs), which bypass the Factor VIII step in the clotting cascade. Aledort Decl. ¶ 17; Young Decl. ¶ 24. This includes Baxalta's BPA product, Feiba. See Bakewell Decl. ¶ 33; Young Decl. ¶ 24; Tr. 299:8-14. Feiba is FDA-approved only for inhibitor patients. See, e.g., Aledort Decl. Ex. J, at 1, ECF No. 46-10. BPAs can be used in two ways, on-demand when a bleeding episode occurs and/or on a regular schedule as prophylaxis. Aledort Decl. ¶ 17; Young Decl. ¶ 25. But BPAs, like Factor VIII replacement therapies, must be infused, which may impose a substantial treatment burden on patients and their families. In particular, the infusion can take up to an hour as often as every other day in order to achieve the desired prophylactic effect. See Callaghan Decl. ¶¶ 20, 26; Young Decl. ¶ 29. (Baxalta's expert, Dr. Aledort, testified that he did not think infusion takes as long as described, but he was unable to provide an alternative estimate. See Tr. 181:16-182:23.) Moreover, the infusion must be administered directly into a vein or through a central venous-access device, more commonly known as a port, and each of these methods entails risk of infection or venous-access issues. See, e.g., Callaghan Decl. ¶ 49; Young Decl. ¶¶ 19, 25.

         Hemlibra, the accused product, treats hemophilia A in yet another manner. In general, antibodies are K-shaped, with two arms connected by disulfide bonds. Strohl Decl. ¶ 22, ECF No. 112. Each arm of the Y shape contains two polypeptides known as the heavy chain and the light chain. See Id. Hemlibra is a bispecific antibody, meaning that the heavy chains on its two arms are not identical. See Krishnaswamy Decl. ¶¶ 55, 60, ECF No. 47; Strohl Decl. ¶¶ 38, 53. One of its arms binds to Factor IX (or IXa) and the other binds to Factor X. See Krishnaswamy Decl. ¶ 55, 60; Strohl Decl. ¶ 53. Hemlibra replaces Factor Villa in the clotting cascade, activates Factor X, and allows the process to continue to clot formation despite the deficiency in Factor VIII caused by hemophilia A. See Krishnaswamy Decl. ¶ 61, Strohl Decl. ¶¶ 178-79. Unlike BPAs, Hemlibra can be administered by a once-weekly subcutaneous injection using a syringe rather than by infusion. Callaghan Decl. ¶¶ 47-48; Young Decl. ¶¶ 50-53.

         The Food and Drug Administration (FDA) approved Hemlibra for hemophilia A patients with inhibitors on November 16, 2017, and Genentech launched the product in the United States for that population later that month. Bakewell Decl. ¶ 40. For the treatment of noninhibitor patients, the FDA has granted Hemlibra Breakthrough-Therapy Designation and Priority Review, Tr. 591:18-24, which generally indicates that the FDA will undertake an expedited review on the basis of promising clinical data and a treatment's expected medical benefits, Tr. 589:2-15. Pursuant to this priority review, Genentech expects approval of Hemlibra for noninhibitor patients no later than early October 2018-and possibly sooner. See Tr. 592:1-593:24. In the meantime, some small number of patients falling within the noninhibitor category are being prescribed Hemlibra by their doctors off-label, i.e., notwithstanding the lack of FDA approval for that patient population. See, e.g., Tr. 526:17-527:4.

         To summarize: there are four products at the heart of this litigation. Baxalta offers two primary Factor VIII replacement therapies for noninhibitor patients: Advate and Adynovate. It also offers a BPA product for inhibitor patients: Feiba. All three Baxalta products can be administered prophylactically and/or on-demand to treat particular bleeding episodes. See, e.g., Tr. 552:15-554:5. None of Baxalta's products practices the '590 patent. Bakewell Decl. ¶ 55. Genentech's product, emicizumab, is marketed as Hemlibra. It is administered only as prophylaxis. See, e.g., Tr. 206:14-23. Hemlibra competes with Feiba in the inhibitor market, and Hemlibra will compete with Advate and Adynovate in the noninhibitor market once FDA approval is forthcoming.

         III. The Proposed Injunction

         Along with its motion for a preliminary injunction, Baxalta filed a proposed order that would bar Genentech from selling or offering to sell Hemlibra to any noninhibitor patients and would allow sales to inhibitor patients only if they (1) had already been receiving Hemlibra or (2) met a set of criteria generally indicating some heightened need for Hemlibra treatment. See Prop. Prelim. Inj. Order ¶¶ 2, 4, 6. Those criteria included a documented annual bleed rate over a certain threshold; a documented, spontaneous life- or limb-threatening bleeding episode; and documented venous-access issues. Id. ¶ 4(b)-(c). The proposed order did not appear to carve out noninhibitor patients who have already been receiving Hemlibra as part of the clinical trials. See Id. ¶ 6; Tr. 199:1-11.

         During the hearing on its motion, Baxalta agreed to broaden the scope of this carveout from its proposed injunction. Tr. 309:23-310:8. In particular, Baxalta agreed "to amend its proposed carveout to extend to all inhibitor patients for FDA-approved use at this time, assuming appropriate steps were taken to ensure that off-label sales did not occur." Tr. 310:4-8. Following the hearing, Baxalta submitted an amended proposed injunction order that would bar Genentech from selling or offering to sell Hemlibra except to:

(a) "patients with inhibitors";
(b) "patients in connection with clinical trials";
(c) "patients without inhibitors who had received HEMLIBRA (whether in connection with clinical studies pursuant to 35 USC § 271(e)(1) or commercially) prior to entry of [the preliminary injunction]"; and
(d) "patients without inhibitors whose doctor has certified that the patient has a medically diagnosed condition that makes intravenous administration of Factor VIII replacement therapy impracticable."

Am. Prop. Prelim. Inj. Order ¶ 4, ECF No. 218. The proposed order would further require Genentech to institute some mechanism for doctors prescribing Hemlibra to certify that their patient falls within one of these categories. Id. ¶ 5(b). It would also require Genentech to "make reasonable efforts to confirm" the accuracy of those certifications. Id. ¶ 5(c).[2]


         "A plaintiff seeking a preliminary injunction must establish [1] that he is likely to success on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest." Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); accord Benisek v. Lamone, 138 S.Ct. 1942, 1943-44 (2018) (per curiam); Osorio-Martinez v. Att'y Gen. U.S., 893 F.3d 153, 178 (3d Cir. 2018); Metalcraft of Mayville, Inc. v. Toro Co., 848 F.3d 1358, 1363-64 (Fed. Cir. 2017).

         Most recently, the Supreme Court has reiterated that "[a]s a matter of equitable discretion, a preliminary injunction does not follow as a matter of course from a plaintiffs showing of a likelihood of success on the merits," rather, the other factors must also be considered and could also support the denial of a preliminary injunction. Benisek, 138 S.Ct. at 1943-44. In Benisek, the Supreme Court affirmed the denial of a preliminary injunction even assuming a likelihood of success on the merits, because "the balance of equities [including a lack of diligence] and the public interest tilted against" granting an injunction. Id.

         Here, the parties have taken starkly different positions on the merits, i.e., the invalidity and infringement of the '590 patent. Both issues present difficult questions best resolved based on a fuller record. But, as in Benisek, even assuming Baxalta has some likelihood of success on the merits, its failure to establish two other ...

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