This week will see the verdict on the NGAL patent held by Phadia.

“Phadia – wasn’t that case solved years ago ?? “- you might ask… Well – lets just say that while the Legal system in Denmark might be just it is not exactly swift. The case – supposedly simple – has now dragged on for 5 years… It has not been at the forefront of the discussions, though I have asked BioPorto at investment meetings about the state of the annullment-case at numerous occasions.

Thats why perhaps a recap of the case would be appropriate… Lets start off with BioPorto 2008 (long time ago) annual report – where the following was written:

From the annual report 2010

Phadia’s NGAL patent Phadia AB, a Swedish company, holds the patent for diagnostic application of NGAL, which is relatively broad in scope and can thus be called an “umbrella” patent . It is still possible to obtain specific patent rights within areas generally covered by this patent . Thus a situation may arise where it is necessary to buy license access for the umbrella patent . If the scope of cover in the patent claims is too broad, it is also possible to apply to have the patent declared wholly or partly invalid . If an underlying patent is obtained, the holder of the umbrella patent is precluded from exploiting the holder’s rights within the specific area of the underlying patent .

Phadia’s patent is issued with slightly differing claims in two geographic areas . In the US, the patent covers the diagnostic use of NGAL for infection and inflammation . In Europe, the patent also covers the diagnostic use of NGAL for all human illnesses (highlight by me) .

The European patent is the one that could affect BioPorto’s freedom to operate on the European market . For this reason, BioPorto chose to file an invalidity action in 2007 against the European patent, initially in Denmark, demanding that the broad claim for diagnostic use of NGAL for all human illnesses be ruled invalid in any event . During the case, Phadia filed a claim that BioPorto violates Phadia’s patent rights . Phadia has further demanded that BioPorto’s NGAL products be withdrawn from the market and that compensation be paid for any units already sold . In 2008, the case mainly involved determining the theme of an expert appraisal and designating the experts . BioPorto’s lawyer in the case does not consider it very likely that the court will concur with Phadia’s separate claim . At the same time, BioPorto’s patent consultant, Høiberg A/S, has stated that it is very likely that Phadia’s broad claims will be ruled invalid, with the result that BioPorto will receive unobstructed market access .

From the annual report 2010

Other parties’ NGAL rights

NGAL is widely accepted as a renal injury marker and has great market potential, which also explains the existence of patents and patent applications from other sector players.

The ongoing invalidity action filed by BioPorto against Phadia is still in process with positive progress (highlight by me), and in 2010 this primarily involved the completion of a second expert appraisal, carried out by the same expert used in the first appraisal, i.e. a doctor with specialized knowledge of such aspects as the molecular weight indication of proteins, and by a patent expert. The result of the second expert appraisal was largely in BioPorto’s favor. In other words, the expert appraisal is satisfactorily completed (highlight by me and the case continues its judicial review. BioPorto expects the Phadia patent—which in Europe covers the diagnostic use of NGAL for all human diseases—to be declared invalid due to its failure to fulfill the novelty requirement. During the case, Phadia filed a claim that BioPorto is violating Phadia’s patent rights. Phadia has further demanded that BioPorto’s NGAL products be withdrawn from the market and that compensation be paid for any units already sold. BioPorto’s lawyer in the case considers it unlikely that the court will concur with Phadia’s claim. At the same time, BioPorto’s patent consultant, Høiberg A/S, has stated that it is highly probable Phadia’s claims will be ruled invalid

(the 2011 annual report held the same information – more or less)

From Q1 interim report 2012

The main legal proceedings in the case filed by BioPorto against Phadia for the revocation of its patent at the Maritime and Commercial Court of Copenhagen ended on March 16, 2012. The ruling is expected to be issued on June 15, 2012.

So much for background: the real question remains – why is Phadia blocking BioPorto’s access to a patent they have never used  and a patent that is expiring i 2014/2015

Indeed, why is Phadia pursuing the case so vigorously ? Well, according to anonymous sources, the trial is secretly being sponsored by Abbott – who have a strategic interest in the matter, in applying maximum pressure on BioPorto.

How is this influential on the ongoing negotiations with global distributors ?  Well, I don’t know – but my esteemed colleague Dr. Druen thinks this is a key element and the last remaining obstacle on the path to Distribution Agreement(s)

What happens in case Bioporto loses ? Normally you will have to pay a percentage of the revenue from the products – in this case – where Phadia is outright flat denying BioPorto access – I simply don’t know…

Anyway, as I understand it,  the verdict is in principle only binding in Denmark, meaning that the case should be taken to court in each and everyone of the jurisdictions that is covered by the patent. Meaning, that even though BioPorto might lose the case, it will not influence other markets, simply because the Legal system is sloooooooow in other countries as well, and the Patent expires in 2014/15 anyways.

If they win however, then there should not be anything preventing BioPorto from full filling the promise they made in April 2012… An Agreement with a Global Distributor in Q2 (or very early Q3 – my remark) 

 

 

About Stengaard

BioPorto investor from way back when... I've invested in BioPorto ever since they made their debut on the danish stock exchange, it been a looooong journey with many obstacles. But well worth it all if Bioporto maintains their patent after the proceedings in 2014, and enters into agreements with Global Distributors in 2012 and 2013 If not, then it'll take another xx.years :)

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3 Responses to Phadia, this weeks decision on NGAL patent

  1. […] ved godt det er at *dumt* spørgsmål, men alligevel interessant :- fandt selv lidt svar her : http://medicoinvestor.com/phadia-this-we… Hvis det osse skulle have undgået andres opmærksomhed Investor1989 9:26 AM hvor lang tid […]

  2. Stengaard says:

    If we accept the assumption that it is Abbott who is the puppetmaster here – then you will with some likelihood see this case tried in a more important market (such as Germany or France). However it will be more difficult for Phadia (et al) – not only because of expiration date of Phadia's patent, but particulary because of the point you mention…

    France is probably closer to introducing NGAl in routine diagnostics than Germany – so Paris would be a good guess (on a bad case :) )

  3. Great post… great sum-up.

    Despite holding the NGAL patent for so many years, Phadia has never made any effort to develope any NGAL assay or even to produce any product which might could have justified their claims.
    Furthermore Phadia being among the opponents in the EPO case vs. Bioporto, did, as the only part, not show up in the court, but opposed the patent only by name.
    Their sole purpose in this national court dispute, is to haul Bioporto thin, and I would in no way be surprised if Abbott… (*Caugh*) I mean Phadia decides to find alternate ways to harass Bioporto in the future.

    But let's win this one, and should Abbott decide to strike in another country, the timeframe is 6 years in a weeker case. (Precedent court ruling)

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