Merck & Co is in danger of losing patent protection for an antibiotic that was a key factor in its $8.4bn acquisition of Cubist Pharma last year.
The US Court of Appeals for the Federal Circuit this week upheld a lower court ruling that invalidated four patents protecting Cubicin (daptomycin) from generic competition until 2020. One patent was upheld, but that expires in June 2016.
The company – known as MSD outside the US and Canada – said in a statement it is “considering its next steps, which may include seeking further review at the Federal Circuit or Supreme Court.”
The basic patent on daptomycin, which was originally developed by Eli Lilly and acquired by Cubist in 1997, expired in the US in 2002, according to court papers.
Cubicin is an injectable antibiotic indicated for complicated skin and skin structure infections caused by Gram-positive bacteria, as well as bacteraemia caused by Staphylococcus aureus. It is the top-selling antibiotic in Merck’s portfolio with sales of $805m in the first nine months of the year.
Last December, a Delaware federal judge invalidated the four Cubicin patents on the grounds of obviousness – on the same day that Merck announced its intention to buy Cubist – in a case brought by Pfizer subsidiary Hospira which plans to launch a generic version of the drug.
Merck pressed ahead with the Cubist acquisition regardless, closing the deal in the first quarter of the year.
In addition to Cubicin, buying Cubist has also given Merck Sivextro (tedizolid phosphate) – anther treatment for skin and skin structure infections, and Zerbaxa (ceftolozane/tazobactam) for complicated intra-abdominal and urinary tract infections.
Neither of these drugs make significant revenues at the moment and sales are not broken out in Merck’s financial accounting, although Zerbaxa in particular has been predicted to become a blockbuster in time.
Nevertheless, if Cubicin succumbs to generic competition early it will lend weight to the arguments of investors who have claimed Merck paid too much for Cubist.