Home / Companies / Celgene settles Revlimid patent litigation with Natco Pharma

Hyderabad: Natco Pharma Ltd and partner Allergan Plc on Wednesday reached a settlement with US-based drug maker Celgene Corp. in the patent infringement case of the latter’s blockbuster cancer drug Revlimid.

The settlement provides Natco with the certainty of a generic Revlimid launch in the US and a billion-dollar windfall during the settlement period, while Celgene will be able to ward off generic competition for at least six years for a drug that contributes about 60% of its sales.

Revlimid or lenalidomide, used to treat blood cancer, had worldwide sales of around $5 billion in 2014. The US sales alone accounted for $3.4 billion in the year ended September.

As part of the settlement, Celgene will permit the entry of lenalidomide before the April 2027 expiration of the patent, the drug maker said.

Celgene has agreed to provide Natco with a permit to Celgene’s patents required to manufacture and sell an unlimited quantity of lenalidomide in the US beginning 31 January 2026. In addition, Natco will receive a volume-limited licence to sell lenalidomide in the US in March 2022.

The volume limit is expected to be a mid-single-digit percentage of the total lenalidomide capsules dispensed in the US during the first full year of entry.

The volume limitation is expected to increase gradually every year until March 2025, and is not expected to exceed one-third of the total lenalidomide capsules dispensed in the US in the final year of the volume-limited licence under this deal.

Natco’s ability to market lenalidomide in the US will be contingent on its obtaining approval of the regulator.

“It’s a win-win deal for both of us. We played it safe," a Natco executive said on condition of anonymity. “It’s hard to judge what will happen after six years, but I think we got a good deal."

“We believe strongly in our patent estate for Revlimid, and this settlement appropriately recognizes the strength of our patents," said Bob Hugin, chairman and chief executive officer of Celgene. “We remain confident in the strength of our patents, and will continue to vigorously defend them."

Revlimid was first approved in December 2005 for use in multiple myeloma, a blood cancer.

On 30 August 2010, Natco first sent a written notice to Celgene about filing an abbreviated new drug application with the US Food and Drug Administration for its copycat version of Revlimid.

On 8 October 2010, Celgene responded by filing an infringement action against Natco, asserting 10 patents.

Natco partnered with Arrow International Ltd to market and distribute the drug in the US. Arrow was acquired by US-based Watson Laboratories Inc. in 2009. Two years later, Watson merged with Actavis Plc. In May, Actavis merged with botox maker Allergan Inc.

Last week, Natco settled a patent litigation with Gilead and others over influenza drug Tamiflu.

“It takes at least six years to see any meaningful revenues coming out of this settlement for Natco. It’s a long time," said Afzaal Mohammed, pharma expert at Karvy Stock Broking Ltd.

“The entry of a new potent drug can cannibalise Revlimide, another generic player may open up litigation and there is a political risk to out-of-court settlements between drug companies that block cheaper generic competition to expensive branded drugs," Mohammed said.

Shares of Natco rose 1.46% to 573 at close on Wednesday, while the benchmark Sensex rose 1.01% to 25,850.30 points.

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