Lilly Settles Cialis Generic Patent Suit, Cuts Exclusivity

Eli Lilly and Company reached a settlement in Virginia federal court with generic drug companies accused of infringing its unit-dose patent for its sexual dysfunction treatment Cialis, maintaining its market exclusivity until at least next fall, the company announced Wednesday.

The settlement brings to a close Lilly’s consolidated suits against five generic drug producers alleging infringement of a patent describing the particular unit dosage of certain enzyme inhibitors that can effectively treat sexual dysfunction. The patent was slated to expire on April 26, 2020, but the settlement agreement allows Cialis exclusivity to now terminate on Sept. 27, 2018, at the earliest, Lilly said in a statement Wednesday.

"The unit-dose patent for Cialis is valid and infringed by companies seeking to market a generic version of Cialis," Michael J. Harrington, senior vice president and general counsel for Lilly, said in a Wednesday statement. "This is a royalty-bearing license agreement that provides us with more certainty regarding our U.S. exclusivity. Protection of intellectual property and the assurance of market exclusivity are extremely important to Lilly as we work to support the development of the next generation of innovative medicines."

Lilly had sued generic drug producers Zydus Pharmaceuticals Inc., Watson Laboratories, inc., Aurobindo Phanna USA Inc., Cipla USA Inc. and Teva Pharmaceuticals USA Inc. for infringement of the dosage patent in separate actions that it consolidated in late 2016, according to court filings.

In a series of consent judgments filed Tuesday and Wednesday, District Judge Anthony J. Trenga recognized Lilly’s settlement agreements with the five drug companies, enjoining them from further infringement and allowing Lilly to enforce compliance with the agreement. Additionally, he noted that the district court retains the power to enforce or evaluate the companies’ adherence to the terms of the agreements.

The terms of the settlement agreement were not publicly available, and Lilly did not return requests for more information Thursday.

“The parties have agreed to terms and conditions representing a negotiated settlement of this action and have set forth those terms and conditions and will execute a final settlement agreement,” the consent judgments state.

Lilly said patent expiration for Adcirca, also related to the Cialis drug, is still expected on Nov. 21, 2017, or on May 21, 2018, pending the U.S. Food and Drug Administration’s decision on the company's application for pediatric exclusivity.

The company also told shareholders Wednesday said that the settlement agreement would not impact its annual financial guidance or mid-term expectations.

In a separate suit, a Texas federal judge stayed a $20 million judgment against Lilly in May while the drugmaker appeals to the Federal Circuit a jury’s finding that Lilly infringed a German pharmaceutical company’s patent when marketing a new use of Cialis. Germany’s Erfindergemeinschaft UroPep GbR said it had told Lilly that seeking U.S. Food and Drug Administration approval to use Cialis to treat a disease called benign prostatic hyperplasia would infringe its patent, but Lilly proceeded anyway.

The patent-in-suit is U.S. Patent Number 6,943,166.

The parties did not respond to requests for comment Thursday.

The drug companies are represented by Steven M. War, William D. Hare and Renita S. Rathinam of McNeely Hare & War LLP, Gregory N. Stillman, Wendy C. McGraw and Ryan Bates of Hunton & Williams LLP, and F. Christopher Mizzo, Abigail E. Lauer, Luke L. Dauchot, Nimalka R. Wickramasekera, Yungmoon Chang and Stefan Miller of Kirkland & Ellis, among others.

Lilly is represented by Charles E. Lipsey, Laura P. Masurovsky, Jessica Leann Andersen Marks and Yieyie Yang of Finnegan Henderson Farabow Garrett & Dunner LLP.

The case is Eli Lilly and Company et al v. Actavis Laboratories UT Inc., case number 1:16-cv-01119, in the U.S. District Court for the Eastern District of Virginia.

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