Silbersher v. Allergan PLC
| Docket Number | 18-cv-03018-JCS |
| Decision Date | 13 March 2023 |
| Parties | ZACHARY SILBERSHER, et al., Plaintiffs, v. ALLERGAN INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
This action was brought under the federal False Claims Act (“FCA”), 31 U.S.C. §§ 37293733, by Plaintiff-Relator Zachary Silbersher (“Relator”) on behalf of the United States and numerous States (the “States”)[1] against two sets of defendants: 1) the “Allergan Defendants” or “Allergan”[2]; and 2) the “Adamas Defendants” or “Adamas.”[3] Each set of defendants brings a motion to dismiss (hereinafter, the “Allergan Motion” and the “Adamas Motion” and collectively, the “Motions”). The Court finds that the Motions are suitable for determination without a hearing and therefore vacates the motion hearing set for March 17, 2023 at 9:30 a.m. pursuant to Civil Local Rule 7-1(b). The Case Management Conference set for the same date will be moved from 9:30 a.m. to 2:00 p.m. For the reasons stated below, the Motions are GRANTED.[4]
The operative complaint in this action is the First Amended Complaint (“FAC”). In the FAC, Relator alleges that the Adamas and Allergan Defendants misled the United States Patent Office (“Patent Office”) into issuing invalid patents protecting the drugs Namenda XR® and Namzaric®, thus perpetuating their monopoly power and allowing them to overcharge the federal government and the States for these drugs under various programs, including Medicare and Medicaid. FAC ¶¶ 1-8.
Relator is a citizen of the State of New York whose “profession focuses on investigating invalid pharmaceutical patents that brand manufacturers use to protect their drugs from price competition.” Id. ¶ 9. He alleges that he has “[t]hrough his independent investigation . . . uncovered non-public information supporting the claims set forth” in the FAC. Id. He further alleges that his “independent research and investigation has generated information that is independent of, and materially adds to, any publicly-disclosed allegations and transactions.” Id. According to Relator, he is an “original source” of information within the meaning of the FCA and he provided the information on which his claims are based to the States and the federal government before he initiated this action. Id. ¶ 10.
Relator alleges that Allergan, Inc., Allergan USA, Inc., Allergan Sales, LLC, and Forest Laboratories Holdings, Ltd. are subsidiaries or divisions of Allergan PLC, which was called Activas PLC until June 15, 2015. Id. ¶ 17. Activas PLC acquired Forest Laboratories, Inc. on July 1, 2014 and acquired Allergan, Inc. on March 17, 2015. Id. ¶¶ 17, 49. Relator alleges that “Defendant Forest Laboratories Holdings, Ltd. is an Irish corporation with its principal place of business at Cumberland House, 1 Victoria Street, Hamilton HMU, Bermuda” and that “Allergan is the successor-in-interest to Forest Laboratories, LLC (f/k/a Forest Laboratories, Inc.) and is liable for any damages to which Forest is liable.” Id. ¶ 16.[6]
Defendant Adamas Pharma, LLC is a Delaware limited liability company with its principal place of business in Emeryville, California; Defendant Adamas Pharmaceuticals, Inc. is a Delaware corporation, also based in Emeryville, California. Id. ¶¶ 18-19. According to Relator, in 2012, Adamas Pharmaceuticals, Inc. entered into a commercialization and development agreement with Forest Laboratories, Inc. with respect to memantine hydrochloride (“memantine”) drugs. Id. ¶¶ 50, 59. Relator alleges that “[a]s part of that agreement, Adamas . . . granted Forest an exclusive license to all of the Went Patents[,]” discussed below. Id.
Namenda XR® is a delayed-release drug whose active pharmaceutical ingredient (“API”) is memantine. Id. ¶ 50. It is used to treat patients with dementia related to Alzheimer's disease. Id. According to Relator, generics of Namenda XR® first became available on February 21, 2018, after the Federal Circuit invalidated patents asserted by Defendants in connection with that drug. Id. Relator alleges that Allergan's United States net revenue for Namenda XR® was approximately $452.8 million in 2017, $627.6 million in 2016 and $759.3 million in 2015. Id. ¶ 52.
Namzaric® is also a delayed-release drug prescribed to treat patients with dementia related to Alzheimer's disease. Id. ¶ 53. It has two APls: memantine hydrochloride and donepezil hydrochloride. Id. ¶ 54. Relator alleges that “[g]eneric manufacturers have been ready to enter the market since at least July 13, 2015, but they have been prevented from doing so by the fraudulently-obtained patents asserted by Defendants” and that “[t]o date, no generic manufacturer has entered the market for Namzaric®.” According to Relator, Allergan launched Namzaric® on May 18, 2015; its net revenue for Namzaric® was approximately $130.8 million in 2017, $57.5 million in 2016 and $11.2 [million] ¶ 2015.” Id. ¶ 56.
Relator alleges that “Defendants listed three categories of patents for Namenda XR® and Namzaric® in the [Food and Drug Administration (“FDA”)]'s database of “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the “Orange Book[, ]” thereby preventing generic manufacturer's from entering the market. FAC ¶ 57.
The first category of patents is the Went Patents, a group of eleven patents that list Dr. Gregory T. Went, PhD., the founder and CEO of Adamas, as the first inventor.[7] Id. ¶ 58. For Namenda XR®, six of the Went Patents are listed in the Orange Book (the '209, '708, '379, '752, '085, and '233 patents), while all eleven are listed for Namzaric®. Id. According to Relator, the Went Patents “are all generally directed to an extended release formulation for memantine.” Id.
The parent patent for all of the Went Patents is the '291 patent, which was issued on November 15, 2011. Id. ¶ 61. Relator alleges that on June 21, 2010, during prosecution of the '291 patent application, the Examiner issued an Office Action that rejected the pending claims as anticipated. Id. ¶ 62. In response, on November 5, 2010, Dr. Went and his co-inventors amended the independent claims of the '291 patent application and submitted a declaration by Dr. Went (the “Original Went Declaration” or “2010 Went Declaration”) in which he discussed the results of two clinical studies conducted by Adamas, the C106 Study and the ME110 Study. Id. ¶ 63. Relator alleges that Dr. Went misrepresented the results of these studies in his declaration, asserting that they showed “no incidence” of certain side effects when in fact, the opposite was true. Id. ¶¶ 66-69, 73. According to Relator, on September 23, 2011, the Examiner allowed the claims based upon the alleged “unexpected results” sworn to by Dr. Went in this declaration. Id. ¶ 73.
Relator alleges that Dr. Went and Adamas continued to resubmit the same fraudulent data and did not correct these misrepresentations when applying for nine additional patents, misleading the Patent Office into granting the applications based on them. Id. ¶¶ 73-90. However, Relator alleges, during prosecution of U.S. Patent Application No. 12/757,824 (“the '824 Application”), on May 7, 2012, Dr. Went submitted another declaration (“the 2012 Went Declaration”) in which he again described the ME110 Study but provided a table of actual results and stated that they showed “little incidence” (rather than “no incidence”) of side effects with the extended release formulation. Id. ¶¶ 68-69. That application was rejected by the Examiner on the basis that the extended release formulation that it claimed did “not present better results in regards to side effects.” Id. ¶ 70. Adamas then abandoned that application. Id. According to Relator, Adamas continued to rely on the Original Went Declaration or slightly modified versions of that declaration that continued to misrepresent the results of the ME110 Study and the Examiner continued to allow the patents for the same reasons it allowed the '291 patent. Id. ¶¶ 74-84.
The second “category of patents” listed for Namenda XR® and Namzaric® upon which Relator relies is a single patent, U.S. Patent No. 8,039,009 (“the '009 patent”). Id. ¶ 91. Relator alleges that the '009 patent was originally assigned to Forest Laboratories, Inc., and expires September 24, 2029.” Id. According to Relator, the '009 patent is “directed to a method of treating Alzheimer's disease with a once-daily sustained release oral dose of memantine.” Id. ¶ 92. Relator alleges that the application was amended to add the “once-daily” requirement after it had been rejected “at least six times” by the Patent Office, and based on this amendment the Patent Office allowed the '009 patent. Id.
Relator alleges “[t]he once-daily limitation in the '009 [p]atent is invalid as obvious in view of U.S. Patent No 6,479,553 (“the '553 [p]atent”), which expressly teaches treating Alzheimer's disease by administering memantine once daily.” Id. ¶ 93. According to Relator, the '009 patent was acquired by fraud because “Defendants were aware of the teachings of the '553 patent, yet, on information and belief, Defendants intentionally failed to alert the Patent Office to the teachings of the '553 patent when they amended the application for the '009 patent to include the once-daily limitation.” Id. ¶¶ 93-94. Relator alleges that the '553 patent had been disclosed during prosecution of the '009 patent on September 28, 2009, but the disclosure was about 18 months before the amendment that required once-daily administration, on March 15, 2011, and therefore the once-daily teaching of the '553 patent had no relevance to the '009 patent application...
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