Alteogen said it believes there is no impact on the progress of its technology out-licensing from a German court's order to halt sales of Merck's cancer drug "Keytruda SC." Keytruda SC was developed using Alteogen's formulation-switching technology.
On the 4th (local time), Halozyme Therapeutics (hereinafter Halozyme) said on its website that the Munich Regional Court's civil division granted its request for a preliminary injunction and ordered MSD to stop sales of Keytruda SC in Germany.
After the news broke, on the 5th Alteogen's share price plunged. Halozyme is considered a rival to Alteogen. Halozyme and Alteogen each independently developed technology that converts intravenous (IV) therapies into subcutaneous (SC) formulations.
MSD received U.S. Food and Drug Administration (FDA) approval for Keytruda SC at the end of Sep. and is selling it. It also obtained approval in Europe on the 19th of last month and is preparing to launch. With SC approval and sales of Keytruda, Alteogen also generates royalty revenue.
However, with the preliminary injunction hampering sales of Keytruda SC in Germany, concerns grew among Alteogen investors in the securities market. MSD and Halozyme are engaged in a patent dispute. Some in the market said the injunction could work against MSD and Alteogen.
The nullity action that MSD filed in Aug. against Halozyme's Hyaluronidase (Enhanze/MDASE) patent is pending before the German Federal Patent Court. Halozyme also filed a separate lawsuit in the United States, claiming that Keytruda SC infringes its MDASE technology patent.
Alteogen issued a statement after the market closed that day. The preliminary injunction case is a legal dispute between partner MSD and Halozyme, not Alteogen. Alteogen said it released the statement to dispel excessive concern over the German court's injunction and that the current injunction should be interpreted as an early-stage measure issued first due to Germany's particular system.
Alteogen said the injunction is a temporary procedure that, due to the characteristics of Germany's patent system, is highly favorable to patent holders and does not represent the final outcome of the lawsuit or the ultimate validity of the patent.
According to the company, unlike the United Kingdom, France, and the Netherlands in Europe, Germany has a bifurcated system that separates determinations of patent infringement from determinations of patent validity. A civil court can quickly decide only on infringement and issue an injunction first, while the Federal Patent Court later rules on whether the patent is truly valid (in a nullity action).
MSD also signaled a strong intent to fight in court. MSD told the Wall Street Journal on the 4th that it considers Halozyme's patents invalid worldwide and views their infringement claims as baseless. MSD also said it believes it will ultimately prevail in court.
On the potential impact on additional technology out-licensing, Alteogen said that even before this matter arose, it had been making sufficient legal and technical preparations with various expert groups and continues to review related information, adding that Alteogen's intellectual property (IP) protection and expansion strategy is not judged by one-off events like today, and that follow-up contract talks are proceeding well regardless of this issue.
Meanwhile, Halozyme's and Alteogen's formulation-switching technology accelerates drug absorption by enzymatically breaking down hyaluronic acid in subcutaneous tissue. Halozyme's platform is called Enhanze, and its advanced version is MDASE; Alteogen's platform is called Hybrozyme. IV cancer drugs take more than 30 minutes just to administer, while SC formulations take only 1–2 minutes, greatly improving dosing convenience for patients. Global pharmaceutical corporations are therefore signing deals with companies that have this technology to adopt it and pursue formulation changes. Drugmakers also gain the benefit of extending patents on their medicines through this approach.