Samsung Epis Holdings(0126Z0)'s subsidiary Samsung Bioepis has faced a string of legal disputes with global pharmaceutical companies as it expands in the global biosimilar market.
Samsung Epis Holdings disclosed contingent liabilities in the notes to its consolidation financial statements for the first quarter, confirming seven major lawsuits currently underway.
The cases include a patent dispute with Janssen Biotech over an SPC (supplementary protection certificate) manufacturing waiver, as well as patent and trademark lawsuits with Pfizer and Novartis.
Most of the products at issue are already on the market and being sold. Samsung Bioepis supplies to the market a Stelara biosimilar (biosimilar) and an etanercept biosimilar, among others.
These lawsuits are seen not as attempts to block launch itself, but as patent and trademark disputes with original drug developers that continue after launch.
The company said it is difficult at this time to predict the final outcomes of the lawsuits, and because the likelihood, amount, and timing of any outflows are uncertain, it recognized them as contingent liabilities rather than a provision in the financial statements.
A Samsung Bioepis official said, "It is difficult to offer an official position regarding lawsuits currently in progress," adding, "As legal proceedings are underway, related matters will be addressed in court."
◇ Janssen SPC dispute emerges as a variable for Europe biosimilar production strategy
The most notable case is the ongoing dispute with Janssen Biotech over the SPC manufacturing waiver.
An SPC is a system that extends the patent protection period for a drug by up to five years to compensate for time spent on development and authorization. The European Union (EU) in 2019 introduced a manufacturing waiver allowing biosimilar and generic corporations to produce products for export outside the EU even during the SPC term.
Samsung Bioepis applied the system as it moved to produce PYZCHIVA, a Stelara (ustekinumab) biosimilar, using its Denmark manufacturing facility.
Janssen, however, argued that Samsung Bioepis' manufacturing did not meet SPC manufacturing waiver requirements and took legal action. Three lawsuits are underway: ▲ an SPC infringement preliminary injunction ▲ an SPC infringement damages claim ▲ and an SPC infringement suit related to manufacturing in Italy.
Separately, a lawsuit over an alleged breach of an agreement between Samsung Bioepis and Janssen is also proceeding.
In particular, a Danish court asked the Court of Justice of the European Union (CJEU) for a ruling on interpretation of the SPC manufacturing waiver rules. The case was filed with the CJEU in Apr.
Key issues include whether storage of products is allowed during export-intended manufacturing, and whether production before marketing authorization in the export country is permissible.
Industry officials say the CJEU's decision could affect production strategies not only for Samsung Bioepis but also for corporations that manufacture biosimilars in Europe and supply them to the United States, the United Kingdom, and elsewhere. Because biopharmaceuticals take a long time to produce and preparation for supply at launch timing is crucial, a stricter interpretation of the SPC manufacturing waiver could inevitably force changes in biosimilar companies' production and inventory strategies.
◇ Pfizer sues over process patents; Novartis litigates over trademarks
Samsung Bioepis is also in a patent dispute with Pfizer over an etanercept biosimilar.
According to the disclosure, Pfizer Ireland Pharmaceuticals and others filed a lawsuit in Australia against Samsung Bioepis and others, alleging infringement of an etanercept manufacturing process patent.
Etanercept is used to treat autoimmune diseases such as rheumatoid arthritis, and the original drug is Pfizer's "Enbrel." Samsung Bioepis developed a biosimilar of the ingredient and sells it as "Benepali" in Europe and "Brenzys" in some overseas markets.
The issue in this case is not the drug substance itself but whether there is infringement of a manufacturing process patent applied in biopharmaceutical production.
With Novartis, a trademark dispute is underway over product name usage.
Novartis filed a lawsuit in Canada seeking to bar use of a trademark in connection with Samsung Bioepis' wet age-related macular degeneration treatment Lucentis (ranibizumab) biosimilar "BYOOVIZ."
Samsung Bioepis lost on appeal, but its application to stay enforcement of the injunction was granted, and the trademark prohibition is currently stayed. In addition, a class action alleging violations of Canada's competition law and a lawsuit over breach of the agreement with Janssen are underway.
◇ Patent battles are inevitable as biosimilars grow
As Samsung Bioepis expands its influence in the global biosimilar market, how it navigates patent disputes with big pharma has emerged as a key variable for competitiveness.
The series of lawsuits around the company shows that while biosimilar companies enter the market after the original drug's compound patent expires, disputes can continue over various follow-on rights such as manufacturing processes, formulations, routes of administration, and trademarks.
In practice, many biosimilar-related patent disputes arise not over the original drug's core compound patents but over follow-on patents.
According to a JAMA study analyzing U.S. biopharmaceutical patent litigation, of 271 patents litigated in biosimilar-related cases from 2010 to 2023, only 12 (4%) were primary patents, with the remainder covering follow-on patents such as manufacturing processes, formulations, and methods of administration.
An official at the National Center for Biotechnology Policy said, "The larger the biosimilar market grows, the more original drugmakers use their patent portfolios to defend their markets," adding, "To compete globally, not only product development capabilities but also patent design-around and response strategies are critical competitive factors."