On March 19, Judge Seeborg of the Northern District of California denied Amgen’s motion for a preliminary injunction in Amgen v. Sandoz. Sandoz recently won the first-ever FDA approval for a biosimilar for its product Zarxio, which is based on Amgen’s blockbuster Neupogen. As part of its efforts to bring Zarxio to market, however, Sandoz did not follow the series of exchanges outlined in the BPCIA’s “patent dance.” Amgen moved for a preliminary injunction, contending that Sandoz’s failure to follow the statutory procedures violated California state law. In response, Sandoz argued that there was no violation of state law because the BPCIA allows biosimilar applicants to choose between following the statutory procedures or launching at risk and exposing themselves to a lawsuit by the innovator.

Judge Seeborg agreed with Sandoz. The court held that a biosimilar applicant may opt out of the “patent dance,” at which point the reference product sponsor may sue for infringement but cannot otherwise “force compliance” with the statute.  Amgen pointed to the law’s repeated use of the word “shall,” but the court found “that an action ‘shall’ be taken does not imply it is mandatory in all contexts.” Rather than a compulsory procedure, the court saw the BPCIA as presenting the applicant with a choice. One the one hand, the applicant could follow the BPCIA procedures and “enjoy a temporary safe harbor from litigation.” On the other hand, an applicant “who values expedience over risk mitigation” may choose to bypass the BPCIA process and invite the reference product sponsor to commence litigation immediately. Judge Seeborg rejected Amgen’s argument that California state law provided a remedy for Sandoz’s decision not to follow the statutory procedures, finding it  “untenable” that Congress could have intended “for sponsors to resort to state laws to enforce mandatory provisions in a federal statute.”

Judge Seeborg also disagreed with Amgen’s reading of the BPCIA’s requirement that the applicant provide notice to the reference product sponsor “not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).”  Amgen argued that this notice could not come until after the product was licensed, i.e., after it had been approved by the FDA. The court held that notice of commercial marketing could come at any time, including before receiving FDA approval. According to Judge Seeborg, Amgen’s reading was “problematic” because it “would tack an unconditional extra six months of market exclusivity” onto the twelve-year statutory exclusivity period for biological reference products.

As Judge Seeborg acknowledged, his conclusion as to the 180-day notice issue was contrary to a previous decision by Judge Chesney of the Northern District of California – in another dispute between Amgen and Sandoz over a different product, Enbrel – holding that the BPCIA required a product to be licensed before the 180-day notice of commercial marketing could be provided.  The Federal Circuit affirmed that decision on other grounds without addressing the BPCIA.  The parties in the current dispute represented to Judge Seeborg that they have mutually consented to seek expedited appeal to the Federal Circuit.