Recent proceedings at two different circuits of the federal courts of appeal may impact the patent and regulatory strategies essential for successful development of stem cell technologies. 

Patent Implications—“Genetic Identicality” of Stem Cells with Donor Cells May Impact Patent Eligibility

On the patent side, the Federal Circuit recently heard oral arguments in In Re Roslin, a case that may impact whether patents to stem cell compositions are patent eligible.  Since last June, when the Supreme Court held in Myriad that “naturally occurring DNA is a product of nature and not patent eligible merely because it has been isolated,” commentators have suggested that the federal courts might also find other biotech products -- such as cloned mammals, cultured stem cells, or recombinant proteins -- patent ineligible.

In In re Roslin, the Roslin Institute at Edinburgh appealed the PTO’s rejection of its claims to mammalian clones as not patent eligible, not novel, and/or obvious in view of prior disclosures.  During the February 5, 2014 hearing, the Federal Circuit panel (Judges Wallach, Dyk, and Moore) entertained arguments from the PTO and Roslin on the patent eligibility of live-born mammalian clones, as exemplified by “Dolly,” the sheep cloned by scientists at the Roslin Institute in 1996.  Judge Moore’s comments to Roslin’s counsel, which appeared representative of the panel’s view, included her remarks that “[t]he Supreme court made it clear in Myriad genetic identicality is off the table,” and “[t]he Court in Myriad made it quite clear what we’re going to do with the case.”  She also directed pointed questions at Roslin’s counsel, “. . . tell me why your case as argued isn’t frivolous in view of Myriad and other Supreme Court precedent? Why didn’t you just dismiss it [after the Supreme Court ruling in Myriad]?" . . “Why are you here today?” and “Did you read Myriad?”  The recording of the oral argument is available hereSee also Carla Mouta’s Hot Biotech Report on the hearing for the AIPLA Biotech Committee (click here).   

A ruling by the In re Roslin panel that a cloned mammal is not patent eligible on the basis of genetic identicality with a naturally occurring animal also may have repercussions on the patent eligibility of claims to reprogrammed stem cells that may have the same genetic make-up as a parent somatic cell.  Developers of stem cell therapies may want to monitor this case, and revisit strategies for securing patent protection on their stem cell technologies, including seeking meaningful coverage for methods of making the stem cells, in addition to coverage for stem cell compositions. 

Regulatory Implications--Stem Cells that Are More than Minimally Manipulated Will Be Regulated As Drugs

On the regulatory side, in 2010, FDA sought an injunction against Regenerative Sciences, LLC, two of the company’s physician founders, and the laboratory director of one of Regenerative Sciences’ licensees to enjoin them from producing and administering to orthopedic patients, a composition comprising the patients’ own stem cells and the antibiotic doxycycline (the Mixture).  On February 4, 2014, in U.S. v. Regenerative Sciences, LLC, the D.C. Circuit Court of Appeals affirmed the district court’s injunction against the defendant-appellants, ruling that the Mixture was subject to regulation by FDA.  The opinion is available here.

Although extraction and preparation of the patient’s stem cells (the Procedure) took place entirely in Colorado, the court ruled that the Procedure impacted interstate markets for orthopedic care, and additionally, the Mixture included doxycycline, which was shipped through interstate commerce, thus rendering the product subject to FDA jurisdiction under the U.S. Constitution's commerce clause.

The D.C. Circuit also rejected the defendant appellants’ attempts to characterize “the Mixture” as a medical procedure, not a drug or biologic product, and therefore not subject to FDA regulation as constituting the practice of medicine, an activity traditionally regulated by the states under the U.S. Constitution.  The court held that “the focus of the FDA’s regulation is the Mixture, subject to regulation both as a drug under the Federal Food, Drug & Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq. and under the Public Health Service Act (PHSA), 42 U.S.C. § 201 et seq.  See, e.g., 21 U.S.C. § 321(g)(1); 42 U.S.C. § 262(j); id. at § 331(k). 

Perhaps most significantly,  the court rejected Regenerative Sciences’ argument that the Mixture fell within the “minimally manipulated” regulatory exemption from manufacturing and labeling restrictions that apply to regulated drugs and biological products.  The “minimally manipulated” exemption – which is found in FDA’s regulations on Human Cells, Tissues, And Cellular And Tissue-Based Products (21 CFR Part 1271) -- applies only if the “processing . . . does not alter the relevant biological characteristics.”  Because appellants admitted that culturing the stem cells was designed to “determine the growth and biological characteristics of the resulting cell population” and that at least in some cases, appellants add substances to the cell culture that affect the differentiation of bone marrow cells, the court held that the Mixture was more than minimally manipulated.

The Regenerative Sciences decision has broad regulatory implications particularly for those firms engaging in stem cell activities under the theory that either they constitute the practice of medicine or fall under the “safe harbor” for stem cells that are only minimally manipulated.  Companies will need to closely examine their practices to verify that they do not involve any actions that cross over the “minimally manipulated” standard in 21 CFR Part 1271.  If more than minimally manipulated, the regulatory hurdles existing under the FDCA and PHSA that will apply to a stem cell product will dramatically alter the entire development program.

Lessons Learned

The two cases illustrate the need to coordinate regulatory and patent strategies in order to minimize any potential conflict between statements made to FDA suggesting that a composition is not substantially different from an earlier or naturally occurring composition, and statements made to the Patent and Trademark Office that a composition is substantially different from products of nature, or distinct from prior therapies. 

To illustrate, in Regenerative Sciences, for the company to have prevailed, it would have been essential for it to prove that its manipulation of the cells was minimal and did not “alter(s) the genes and proteins they express.”  In contrast, in In re Roslin, the government (PTO) appears to have successfully argued against patent coverage because the cloned mammals were not markedly different from naturally occurring mammals, and any phenotypic differences between the cloned mammals and the parent donor were “solely attributable to nature” and “outside human control.” 

Because resolving these contending views will require careful planning and coordination, stem cell firms also will need to tackle these challenges very early in their product development cycles to assure that statements made in patents filings, which often come before FDA efforts, do not undermine regulatory strategies.