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Amphastar Pharmaceuticals, Inc. v. Momenta Pharmaceuticals, Inc.

United States District Court, D. Massachusetts

March 20, 2018

AMPHASTAR PHARMACEUTICALS, INC. and INTERNATIONAL MEDICATION SYSTEMS, LTD., Plaintiffs,
v.
MOMENTA PHARMACEUTICALS, INC. and SANDOZ INC., Defendants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         This is an antitrust case in which plaintiffs Amphastar Pharmaceuticals, Inc. (“Amphastar Pharmaceuticals”) and International Medication Systems, Ltd. (“IMS”)(collectively, “Amphastar” or “plaintiffs”) allege that defendants Momenta Pharmaceuticals, Inc. (“Momenta Pharmaceuticals”) and Sandoz Inc. (“Sandoz”)(collectively, “Momenta” or “defendants”) restricted trade and prevented competition in the manufacture and sales of the generic drug enoxaparin.

         Pending before the Court is Momenta's motion to dismiss the complaint (Docket No. 17), which will be treated as a motion to dismiss the amended complaint pursuant to the parties' stipulation. For the following reasons, the motion to dismiss will be denied.

         I. Background and Procedural History

         A. The Parties

         Plaintiff Amphastar Pharmaceuticals is a pharmaceutical company located in California which develops, manufactures and sells pharmaceutical products including generic enoxaparin throughout the United States. Enoxaparin is an anti-coagulant used to prevent blood clots.

         Plaintiff IMS is a wholly-owned subsidiary of Amphastar Pharmaceuticals with a principal place of business in California. It manufactures the active pharmaceutical ingredient in Amphastar's generic enoxaparin.

         Defendant Momenta Pharmaceuticals is the assignee of United States Patent No. 7, 575, 886 (“the ‘886 patent”) which concerns a testing process used in manufacturing enoxaparin. Momenta Pharmaceuticals acts as the contract laboratory for defendant Sandoz and is a Delaware corporation with its principal place of business in Massachusetts.

         Defendant Sandoz distributes, markets and sells generic enoxaparin products throughout the United States. It is a Colorado corporation with its principal place of business in New Jersey. It allegedly entered into a profit-sharing, contractual relationship with Momenta which rendered it the exclusive licensee of the ‘886 patent.

         B. The Alleged Conduct

         In November, 2003, defendants entered into a Collaboration and License Agreement (“Collaboration Agreement”) to develop, market and sell “enoxaparin sodium injection” in the United States. The Collaboration Agreement granted an exclusive license of the ‘886 patent, which had not yet issued, to Sandoz. Plaintiffs claim that the agreement “heavily” incentivized anticompetitive behavior by requiring Sandoz to make “milestone payments”, profit sharing payments and royalty payments to Momenta Pharmaceuticals for the privilege of remaining the sole source of generic enoxaparin in the United States.

         In or before February, 2007, the United States Pharmacopeial Convention (“USP”) commenced the process for establishing a drug standard to test enoxaparin products. The USP is a scientific and impartial nonprofit organization which sets uniform standards for the identity, strength, quality and purity of medicines, food ingredients and dietary supplements. USP policy prohibits it from favoring one manufacturer over another during the standard-setting process and requires its committee members to disclose any conflicts of interest. A member with a conflict cannot attend the final discussion, deliberation or vote on the conflicted issues.

         Sanofi-Aventis (“Aventis”) proposed the standard known as USP Method <207> (“the 207 Method”) to the USP. Dr. Zachary Shriver (“Dr. Shriver”), an employee and director of Momenta Pharmaceuticals who would later be named as an inventor on the ‘886 patent, served as Momenta's representative on the USP panel tasked with developing and approving the USP standard for enoxaparin. Sandoz also participated in the panel discussions.

         The amended complaint alleges that Dr. Shriver and defendants learned, during the USP's consideration of the 207 Method, that Aventis had a pending patent application containing claims which would read on the 207 Method. Defendants purportedly demanded that Aventis abandon its patent application so that any member of the public could practice the enoxaparin standard adopted by the USP. Plaintiffs proffer that demand as evidence that defendants were “very familiar” with the 207 Method and the USP policy on conflicts of interest.

         In November, 2008, the USP convened a panel meeting which commenced with a review of the USP policy on conflicts. Momenta Pharmaceuticals presented the 207 Method in a “detailed” presentation to the USP. USP staff reported that it was “not aware of any patent issue that may cover the test”. Plaintiffs allege that neither Dr. Shriver, who was present at the meeting, nor any other representative of the defendants disclosed to the USP the conflicts posed by their own pending application for the ‘886 patent and the Collaboration Agreement. Plaintiffs assert that no other USP panel member knew that the ‘886 patent, which eventually issued in August, 2009, would cover the use of the 207 Method.

         In December, 2009, the USP approved and adopted the 207 Method as its enoxaparin standard after Aventis agreed to abandon its patent application. The USP convened two more panel meetings in March and April of 2011. Plaintiffs claim that Dr. Shriver and another Momenta representative participated in the meetings and continued to violate their duty to disclose their and the defendants' conflicts of interest to the USP.

         Sandoz was the first entity to receive approval from the United States Food and Drug Administration (“FDA”) to sell generic enoxaparin in the United States in July, 2010. Defendants thus became the sole source of generic enoxaparin until Amphastar also received FDA approval to sell enoxaparin September, 2011. Plaintiffs allege that 1) the FDA required them to comply with the 207 Method as a condition of approval, 2) the 207 Method included steps protected by the patented method, 3) the ‘886 patent excluded unlicensed competitors from receiving FDA approval and thus 4) the ‘886 patent excluded new entrants from the market.

         Two days after Amphastar received FDA approval, Momenta commenced an action in this Court alleging that Amphastar infringed the ‘886 patent. Amphastar claims that the lawsuit prevented it from selling generic enoxaparin in the relevant market.

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