Biovail Corp. Intern. v. Aktiengesellschaft
| Decision Date | 01 June 1999 |
| Docket Number | No. Civ.A. 98-1434(MTB).,Civ.A. 98-1434(MTB). |
| Citation | 49 F.Supp.2d 750 |
| Parties | BIOVAIL CORPORATION INTERNATIONAL, Plaintiff, v. Hoechst AKTIENGESELLSCHAFT, Hoechst Marion Roussel, Inc., Hoechst Marion Roussel North America, Inc., Carderm Capital L.P., Horst Waesche, Daniel Camus, Richard J. Markham, Peter W. Ladell, Gerald P. Belle, and Jurgen Dormann, Defendants. |
| Court | U.S. District Court — District of New Jersey |
Thomas M. Licata, Kelley Drye & Warren, Parsippany, New Jersey, Kevin J. McKenna, Gibbons, Del Deo, Dolan, Griffinger & Vecchione, Newark, New Jersey, David W. MacGregor, Proskauer Rose, Clifton, New Jersey, for plaintiff.
Liza M. Walsh, Connell, Foley & Geiser, Roseland, New Jersey, for defendants Hoechst Aktiengesellschaft, Hoechst Marion Roussel, Inc., Hoechst Marion Roussel North, Daniel Camus, Richard J. Markham Peter W. Ladell, Gerald P. Belle, and Jurgen Dormann.
Lindsey H. Taylor, Friedman Siegelbaum, Roseland, New Jersey, for defendant Carderm Capital L.P.
Biovail Corporation International ("Biovail" or "plaintiff") filed a five-count complaint with this court on April 27, 1998. This matter comes before the court on a motion to dismiss the complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) filed by defendants Hoechst Aktiengesellschaft ("Hoechst AG"), Hoechst Marion Roussel, Inc. ("HMRI"), Hoechst Marion Roussel North America, Inc., and Carderm Capital L.P. ("Carderm") (collectively as "Hoechst defendants"). Defendants Horst Waesche ("Waesche"), Daniel Camus ("Camus"), Richard J. Markham ("Markham"), Peter W. Ladell ("Ladell"), Gerald P. Belle ("Belle"), and Jurgen Dormann ("Dormann") (collectively as "Individual Defendants") join in the motion to dismiss (thus, all defendants will be referred to collectively as "defendants" or "Hoechst") and have also filed a separate motion to dismiss stating independent grounds for dismissal of the claims levied against them. For the following reasons, this court will deny the motions.
Biovail is a Canadian pharmaceutical company involved in the manufacture and development of drugs that treat chronic conditions such as high blood pressure. See Compl. ¶ 4. Defendants are also engaged in the production and sale of pharmaceutical products. Id. ¶¶ 5-10.
Marion Merrell Dow initially introduced the pioneer drug which used diltiazem, a calcium channel blocker, as an active ingredient to treat high blood pressure and angina. Id. ¶¶ 21-22. The brand name of the drug was Cardizem. Id. In June of 1993, Hoechst-Roussel Pharmaceuticals, Inc. ("HRP"), a subsidiary of Hoechst AG and a company associated with Hoechst-USA, entered into a Rights Agreement with Biovail under which the companies would jointly develop diltiazem-based drugs that would compete with Cardizem. Id. ¶ 29. The first such product developed was a once-daily form of diltiazem to be sold under the name of Tiazac. Id. HRP filed a New Drug Application ("NDA") for Tiazac with the FDA certifying its safety and effectiveness. Id.
Much to Biovail's chagrin, in late 1994, Hoechst AG announced that it planned to acquire Marion Merrell Dow and thereafter HRP terminated its joint venture with Biovail. Id. ¶ 31. Biovail sued Hoechst AG and others for contract and antitrust violations and, on April 28, 1995, the parties entered into a settlement agreement and release ("Settlement Agreement"). Id. ¶¶ 32-33; see also Spears Decl., Exh. C. The Settlement Agreement provided, among other things, that Biovail was to be assigned the rights to the Tiazac NDA, see Compl. ¶ 35, and Hoechst AG, Hoechst-USA, and Carderm covenanted
not to sue Biovail ..., or initiate any regulatory proceedings or legal actions challenging or contesting in any manner whatsoever the Product with respect to any claim of patent infringement relating to the Product or regulatory approvals of the Product now or in the future.
Id. ¶ 34; Spears Decl., Exh. C at 14-15. "The Product" was defined in the Settlement Agreement as:
certain formulations for a once daily, extended release medicine containing diltiazem hydrochloride as further defined in Section 1.01.32 of the Rights Agreement and any improvements thereto or any formulation thereof alone or in combination with at least one other active ingredient.
Compl. ¶ 34; Spears Decl., Exh. C at 1.
The Federal Trade Commission ("FTC") then initiated an investigation into the proposed acquisition of Marion Merrell Dow by Hoechst AG. Id. ¶ 36. This investigation was settled by a consent decree that became final on April 17, 1996 ("FTC Decree"). Id.; see also Compl., Exh. A; Spears Decl., Exh. D. In order to rectify the potential anticompetitive effects of the acquisition, the FTC ordered, inter alia, that Hoechst and Marion Merrell Dow give Biovail a right of reference to the pharmacology and toxicology data filed with the FDA in support of Marion Merrell Dow's NDA for Cardizem. More specifically, the FTC Decree provided that Hoechst AG:
shall grant to Biovail the right of reference to the pharmacology, toxicology and animal reproductive toxicology data contained in [Marion Merrell Dow's] NDA No. 18-602 for Diltiazem on file with the FDA. [Hoechst AG] shall make the necessary filings with the FDA authorizing the FDA to refer to the appropriate section(s) of [Marion Merrell Dow's] NDA No. 18-602 for such data (including, but not limited to, pharmacology and toxicology data) in support of Biovail's NDA No. 20-401 for the Biovail Diltiazem Products, including any supplemental NDAs or related NDAs.
Spears Decl., Exh. D. at 3; see also Compl. ¶ 37. A right of reference is useful because it allows the referenced party to refer to and adopt data already filed with the FDA by a previous filer rather than submit independent data. See Compl. ¶ 37.
On December 18, 1995, a representative of Hoechst-USA, using Marion Merrell Dow letterhead, sent the FTC mandated "right of reference" letter to the FDA. See Compl. ¶ 55. It stated in part:
Hoechst Marion Roussel, Inc. (formerly Marion Merrell Dow Inc.) ("HMR") hereby authorizes Biovail Corporation International ("Biovail") to reference the pharmacology, toxicology and animal reproductive toxicology data contained in HMR's NDA 18-602 for diltiazem hydrochloride in support of Biovail's NDA No. 20-401 for a once-a-day dosage form of diltiazem hydrochloride, including any supplemental NDAs or NDAs related to that product.
Spears Decl., Exh. E ("reference letter").
On February 5, 1996, Biovail sought the FDA's opinion as to the scope of the reference letter. See Compl. ¶ 56. On April 8, 1996, the FDA replied:
Specifically, you asked whether FDA believed that the authorization language in [the reference letter] is broad enough to encompass all future diltiazem submissions that Biovail might file.
We have examined the language in the letter and believe that it is sufficiently broad to allow us to recognize a right of reference to the pharmacology, toxicology, and animal reproductive toxicology data contained in HMR's NDA 18-602 in any diltiazem hydrochloride new drug application or supplement that Biovail submits.
Golden Aff., Exh. H;1 see also Compl. ¶¶ 56-57. HMR, however, wrote to the FDA on July 11, 1996 and informed it that Spears Aff., Exh. F. In addition, by letter of October 28, 1996, HMRI reiterated to the FDA that the right of reference granted to Biovail permitted reference only to obtain approval for the diltiazem formulation submitted in NDA 20-401 [Tiazac] and any NDA or supplement "for this same product." Spears Decl., Exh. G. "[N]o right of reference to the preclinical data on diltiazem contained in NDA 18-602 would be permitted for [Biovail for] any one-a-day formulation of diltiazem not originally submitted in NDA 20-401." Spears Aff., Exh. G at 2. In light of this express limitation by Hoechst, on November 8, 1996, the FDA retracted its broader interpretation of the possible scope of the right of reference set forth in its letter of April 8, 1996. See Golden Aff., Exh. I at 3; see also Compl. ¶ 59.
Thus, in November 1997, when Biovail filed an NDA (No. 20-939) with the FDA for a generic version of Cardizem CD, the once-daily dosage form of Cardizem, the NDA was rejected. The FDA refused to file Biovail's NDA 20-939 for the following reasons:
NDA 20-939 contains no nonclinical pharmacology or toxicology data. It is your intent to rely on the right of reference for those data that was granted to you by Hoechst Marion Roussel ("HMR") to support the approval of your NDA 20-401. As we had informed you in our letter dated November 8, 1996 (enclosed), the right of reference that was granted to you by HMR for NDA 20-401 does not permit reference to HMR's NDA 18-602 for any once-daily diltiazem product that was not originally submitted to NDA 20-401. The diltiazem product covered by NDA 20-939 is different from the product covered by NDA 20-401. We therefore consider NDA 20-939 to be incomplete and can not be filed according to 21 C.F.R. 314.101(d)(3).
Biovail also sought to have Tiazac approved in Canada by Canada's Health Protection Branch ("HPB"). See Compl. ¶ 41. Biovail states that on February 16, 1996 it was orally informed by a representative of the HPB that the efficacy and safety review had been successfully completed on Tiazac and that the review of the product monograph, or product labeling, would be completed within the next eight weeks. See Compl. ¶ 42. On March 11, 1996, Hoechst Marion Roussel Canada ("Hoechst-Canada") sent a letter to the HPB expressing what Biovail asserts were "specious safety concerns about the nonbioequivalence of Tiazac to Cardizem CD." Compl. ¶ 47; see also Spears Decl., Exh. A. On April 12,...
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