Eleventh Hour Settlement in Cialis Patent Suit Clears Path for Generics

Kirkland & Ellis acted quickly to strike a deal that allows generic drug makers into the $2.5-billion a year market for erectile dysfunction drug Cialis next year.

Teva Pharmaceuticals USA Inc., Watson Laboratories Inc. and a handful of other generics had been set to go to trial against Eli Lilly & Co. and its subsidiary ICOS Corp. on July 17 over patent rights to the drug, generically known as tadalafil.

Lilly announced Tuesday it reached a settlement that extends its exclusive right to market Cialis through September 2018. That’s four to 10 months longer than had been expected based on its patent on the tadalafil compound. In exchange, Lilly is giving up the last 19 months of coverage on a separate patent that covers the dosage range, which had been set to run through April 2020.

Lilly and ICOS are represented by Finnegan, Henderson, Farabow, Garrett & Dunner. They sued the generics last September after the generics filed applications with the FDA to enter the Cialis market, contending that Lilly’s dosage patent was invalid.

A Kirkland team led by partners Christopher Mizzo and Luke Dauchot substituted in for Axinn, Veltrop & Harkrider in March as the case blazed along the rocket docket of the Eastern District of Virginia.

In court papers, the generics argued that Lilly’s own previous patents had described using “an effective amount” of tadalafil to treat erectile dysfunction, rendering the dosage patent obvious. They accused Lilly of trying to “have your cake and eat it too” by presenting expert testimony that questioned the validity of those previous patents.

Lilly general counsel Michael Harrington said in Lilly’s announcement that the deal provides that dosage patent “is valid and infringed by companies seeking to market a generic version of Cialis.” He described the settlement as “a royalty-bearing license agreement that provides us with more certainty regarding our U.S. exclusivity."

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