Apotex Can Again Seek Invalidation of Patent

A U.S. appeals court Wednesday gave generic-drug maker Apotex Inc. a second chance to seek the invalidation of a patent for Acular, Allergan Inc.’s treatment for eye inflammations.

The U.S. Court of Appeals for the Federal Circuit in Washington ruled that a San Francisco judge committed a “clear error” when he concluded that Allergan’s patent was valid because it wasn’t an obvious variation of earlier known compounds. The court, saying there were necessary factors that weren’t considered, ordered him to review the issue.

Acular, first approved by regulators in 1992, is used to treat allergies, photophobia, post-surgical pain and post-surgical inflammation.

Allergan, which also makes the anti-wrinkle treatment Botox, contends that the patent protects the drug from generic competition until 2009.

The company had said in its most recent quarterly earnings report, filed in April, that if the appeals ruling reversed the prior judgment, Acular could face immediate generic competition.

“Allergan is confident in our intellectual property position when the claim is reviewed at the District Court level,” Allergan spokeswoman Stephanie Fagan said Wednesday.

The Circuit Court upheld U.S. District Judge Martin Jenkins’ interpretation of the patent. The appeals court declined to address whether Apotex’s proposed generic version would infringe the patent. Closely held Apotex is the largest Canadian-owned pharmaceutical company.

“The District Court should consider Apotex’s claim of obviousness in light of the applicable legal principles and unencumbered by the factual errors identified” in the ruling, the appeals court said.

Elie Betito, a spokeswoman for Toronto-based Apotex, had no immediate comment on the ruling, which was posted Wednesday on the appeals court’s website.

Irvine-based Allergan makes Acular with partner Syntex, a unit of Swiss drug maker Roche Holding. Allergan’s eye-care business, which includes Acular and Restasis drops for chronic dry eyes, accounted for $999.5 million, or 57%, of Allergan’s sales last year.

The Federal Trade Commission had been investigating whether Allergan and Syntex improperly thwarted generic competition by misusing the patent rights. The agency dropped the probe based on the finding of validity by the trial judge.

Allergan shares fell 9 cents Wednesday to $77.90 on the New York Stock Exchange.