Monthly Archives: July 2012

Interesting New Developments

1. On 26 July 2012 the USPTO published proposed guidelines for the first-to-file changes.  As expected there are provisions for an inventor disclosure to preclude (negate) third party disclosures (which has been described as a ‘first-to-publish’ system).  According to IPWatchdog the inventor and third party disclosures have to be identical, without any trivial variations.  Thus broader or narrower disclosures would presumably not be precluded.  This seems to severely curtail use of inventor disclosures to protect againt third party disclosures.

2. A new G decision, G1/10, has issued from the Enlarged Board of the EPO.  It is reported and available at the K’s Law blogsite.  The decision concerns whether a patent can be corrected based on Rule 140 EPC.  The Enlarged Board decided that it could not.

3. epi Information 2/12 (June 12) reports a meeting between the epi Biotech Committe and the EPO. One of the areas discussed was pharmacogenomics and claims to treatment of patients with a specified marker (such as an SNP or particular methylation profile). The EPO said that often such claims can lack novelty as at least one patient with the specified marker will have been treated even if the prior art does not explicitly say so.  If EPO Examiners adopt that position on novelty it will clearly make it more difficult to obtain patents in the field of personalised medicine where the contribution is identification of the patient group to be treated.  IPKat has written about this.

4. On 8 August 2012 the Big Red Biotech blog reported on the innovation crisis in pharma. Quoting from recent articles in the topic it claimed much more is spent on marketing (25% of revenues) than discovering new molecules (1.3%).  In addition pharma was alleged to have been focusing on development of me-too drugs, minor variations of existing drugs, rather than genuinely innovative therapies.

5. The SPC Blog reported publication of the CJEU decision on Case C-130/11 Neurim Pharmaceuticals.  The CJEU decided that existence of an existing marketing authorisation in the EU for the active ingredient did not  preclude an SPC for a different application of the same product for which marketing authorisation has been granted.  This went against the existing view on the issue.

6. The Federal Circuit came to the same judgment in the Myriad case of deeming claims to isolated human genes to be patentable after being asked by the Supreme Court to look at the issue again in view of Mayo v Prometheus.  Link to the Burrill Report article about it is here.

7. On 31 August 2012 the Federal Circuit issued an en banc decision on Akamai Technologies v Limelight Networks and McKesson Technologies Epic Systems concerning establishing of infringement when no single party performs all of the steps of the method claim.  The Court found that direct infringement required a party to perform all of the steps of the claim. However inducement of infringement could occur even where no one party performs every step of the claim.  This clearly has implications in the drafting of patent claims. It has already been noted that it is relevant to personalised medicine where diagnostic and therapy steps may be performed by different parties (see PharmaPatents).

8.  In the Federal Circuit judgment Santarus v Par Pharmaceutical the Court stated that ‘Negative claims limitations are adequately supported when the specification describes a reason to exclude the relevant information’. This raises the question of whether the Written Description requirement for negative limitations is stricter than for positive limitations (see IPWatchdog).

9.  The new supplemental examination is effective as of 16 September 2012. It allows a patentee to seek a review of a patent based on newly submitted information.  That can lead to the USPTO ordering reexamination. PatentlyO discuses how this may inoculate against failing to disclose prior art references during examination or even filing false data.

Trends in Biotech/Pharma and Biotech Patenting

1. The number of life science venture capital firms is decreasing in the US as reported by The Big Red Biotech Blog and Life Sci VC.

2. FiercePharma reports on 8 Aug 12 on fast-growing generics companies which are taking advantage of big pharma’s patent cliffs. Sagent Pharmaceuticals saw an increase of 106% in sales last year and Ranbaxy made $500 million from Lipitor in its the first 6 months on the market. On occasion big pharma have teamed up with the generics-maker to take advantage of their low cost production and access to markets in the developing world.

3. In the past big pharma would acquire biotechs in cash-based deal and then take control. Now most transactions are based on predetermined milestones allowing risks to be shared going forward (see techdirt).

4.  Patent Office always seem to get stricter.  The European Patent Office has in recent years become increasingly strict on added matter, priority entitlement, searchability, industrial applicability of gene sequences and polymorphisms and definitions of disease conditions.

5. Orphan drugs are becoming an increasingly important area. In the last decade the growth rate in revenue has been 25.8% (versus 20.1% for the non-orphan drug sector).  The market is now worth $50 billion and is expected to keep growing at a high rate.  The biggest disease category for orphan drugs is cancer. (see FierceBiotech)

6. Big pharma are using a lot of their surplus cash to buy back their stock.  However this does not seem to correlate with a rise in the value of their shares, and so it is questionable whether it is a good use of their money. $75 billion of stock purchases will have been completed between January 2011 and December 2012 by the top 15 big biopharma companies.  The money could instead be used to fund smaller biotech companies (see Life Sci VC).

7. According to a report by Shareholder Representatiive Services analysing 47 undisclosed pharma and medtech deals since 2008, nearly 50% of the near-term milestones have been paid or are likely to be paid.  It’s only a matter of time before milestone-buying funds get raised to monetise these payment streams (Life Sci VC).

8. In the US the chasm between small biotechs and large biotechs is increasing. 90% of small biotechs reported losses in 2011, whilst the sector grew from $76m from $62m (Big Red Biotech).

What UK Biotech And Patenting Need

The UK is a different place from the US in terms of its business culture and how easy it is to obtain money to fund companies. The US is much more dynamic and clearly much more successful in biotech. That can be seen by the existence of large independent biotech companies in the US and the constant willingness to look for and adopt appropriate models to solve the problems encountered in the different parts of the biotech sector.

The list below is based on personal observations of how the UK biotech sector could be improved.

  1. More ambition in attracting money into biotech, including consideration of non-traditional sources of funding. That means thinking about how to present the technology to investors who are not able to easily understand it.  Investors know that investing in biotech is very risky.  However VC’s do operate in this area and they are well placed to develop ways of quantifying and mitigating risk.
  2. Being up to speed on trends and fashions that will affect the sector, and trying to position oneself to take advantage. For example knowing how big pharma is investing in biotech and becoming capable of working with them.
  3. Leaving IP to the experts. Patents are very important in giving value to a company. Patent attorney advice is expensive, but needs to be sought at an early stage.  It is good to place oneself in the position of knowing what one needs to know about IP and having some awareness of what future filings look like.
  4. Participating passionately in the biotech and finance community.  Being open to all the different activities that will assist one’s commercial goals, including government lobbying,and forming alliances.
  5. Knowing about the different research models to adopt, and what will and will not work.  Do not assume any part of the organisation has considered all options before investigating that fact.
  6. The UK seems to need an effective way of publicising biotech inventions which are available to commercialise.  Perhaps a central database of some sort.
  7. Identifying and taking advantage of all the available information.  Most things have been done before, and if so someone, usually in the US, will have written about them on the internet.  US experiences are not necessarily directly relevant, but they will provide a starting point for what needs to be thought about.
  8. Develop a very positive culture about solving the many problems that will be encountered.

 

Top 10 Points from Steve Burrill’s Talk At BIO 2012 Presenting His State of the Biotech Industry Report

  1. The general theme was ‘The New Austerity’.
  2. There are several crises facing the industry and country: the end of the blockbuster drug era, poverty and its impact on disease, dysfunctionality of the healthcare system, the European debt crisis.
  3. Governments are cutting spending on drugs or mandating reduction in drug prices, e.g. by requiring generic drugs to be available.
  4. An increase in biologic drugs is taking place.
  5. There is increased uncertainty in patenting given Prometheus and patent reforms.
  6. There is the question of who is going to pay for healthcare and reduction in R & D spending that is taking place.
  7. It is becoming tougher to innovate, but it is necessary to move from treatment-based to prevention-based healthcare.
  8. New models for innovation are appearing, such as the collaboration between pharma and academics.
  9. Emerging markets are becoming a magnet for pharma and biotech investments.
  10. The wastefulness of big pharma is being recognised.  Most drugs only work for at best 50% of the population, the worst being cancer drugs which can be up to 75% ineffective.

Top 10 Things To Learn About Biotech From Ernest & Young’s Global Biotechnology Report 2012

  1. R & D needs to be reinvigorated by organisations adopting a more open approach and greater readiness to embrace ideas which originated in others people’s labs.
  2. Big pharma’s real capacity (their ‘firepower’) has declined by 30% between 2006 and 2011 and so the expectation is that will be contributing less and less to biotech innovation as they divert resources to building a presence in emerging markets.
  3. However big pharma do realise that biotech is important to their future, and perhaps they could band together to create a fund to purchase biotech IPOs.
  4. Phase II testing needs to change so that more observation is done allowing hypothesis generation to happen at this stage.
  5. The publically traded biotech companies did well in Australia, Canada, Europe and US last year.
  6. The industry leaders took advantage of low interest rates to raise large sums of debt and used this for acquisitions or stock buy backs.
  7. Biotech continues to be a story of haves and have-nots, with most of the innovation capital being raised by a small number of companies.
  8. The vast majority of last year’s IPOs were priced below the desired range.
  9. In contrast to the US, Europe has not seen financing return to the levels prior to the financial crisis in 2008.
  10. Big pharma has been absent from the largest M&A’s, being the buyer in only 7 out of 57 M&A’s in Europe and the US last year.