Abbott plans to appeal $1.67 billion patent ruling
NEW YORK -- Abbott Laboratories plans to appeal a jury's $1.67 billion patent infringement ruling in a case involving two blockbuster drugs that treat rheumatoid arthritis and other immune disorders.
Late Monday, a jury in the Eastern District of Texas found that Abbott's best-selling drug, Humira, violated a patent on Johnson & Johnson's Remicade. The two biologic drugs each treat arthritis by blocking proteins that cause inflammation.
Abbott said Tuesday it will appeal the ruling.
"We're confident we'll prevail on appeal and thus we would not owe any damages," Abbott spokesman Scott Stoffel said in an e-mail.
He said the company's current financial guidance is not affected. Abbott shares, however, fell about 2 percent in afternoon trading.
Both Remicade and Humira are intravenous drugs that are approved to treat a variety of immune system-related ailments, including psoriasis, Crohn's disease and ulcerative colitis. They work by blocking proteins called tumor necrosis factor. When too much of that protein is present in the body, it can cause inflammation and damage to bones, cartilage and tissue.
Wyeth and Amgen Inc.'s drug Enbrel works in the same fashion, as does Cimzia from Belgium's UCB.
In a note to clients, Goldman Sachs analyst Jami Rubin said the appeals process could last for years, and the award could be reduced or eliminated. She said Johnson & Johnson is not trying to block further sales of Humira and the Texas jury was not asked to award royalties on Humira sales.
Rubin believes Abbott, based in Libertyville Township, could afford to make the payment if it must.
Remicade was first approved August 1998, and Humira gained Food and Drug Administration approval at the end of 2002. Abbott says it discovered Humira, and filed a patent, before Johnson & Johnson began the research that lead to the discovery of Remicade. Johnson & Johnson reported $3.7 billion in Remicade sales in 2008, and the company is working on a similar drug called Simponi, which can be injected by the patient once a month. Remicade is administered once every six to eight weeks by a health care professional.
Humira is Abbott's top-selling drug, with revenue of $4.5 billion last year. Abbott predicted sales of up to $5.4 billion in 2009.
Johnson & Johnson, based in New Brunswick, N.J., filed its suit against Abbott in April 2007. German drugmaker Bayer is also suing Abbott for patent infringement, saying Humira infringes on a patent it registered decades ago. Abbott said Humira doesn't infringe that patent, and believes Bayer's patent is not valid and not enforceable.
In afternoon trading, Johnson & Johnson shares fell 55 cents to $56.40, and Abbott shares lost 95 cents to $46.87.