Aricept®

An important first-line treatment for Alzheimer’s disease is donepezil hydrochloride. It is sold under the brand name Aricept®. Aricept® produced an estimated 2006 operating income of US$ 1.8 billion in The United States alone. Given the aging of the population in the developed world and in China, the demand for Alzheimer’s disease treatments can unfortunately be expected to grow steadily.

The future financial outlook for Aricept® is impacted by several factors. First, the original Aricept® patent expires in 2010, opening the market to improved next-generation products. Second, donepezil hydrochloride is chemically unstable; it degrades rapidly on exposure to humidity. Its clinical efficacy may thus be limited by chemical degradation while stored in the pharmacy or in the patient’s medicine cabinet. To prepare a next-generation product to follow the 2010 patent expiration, and to address the instability problem, a number of drug manufacturers have been actively researching improved, more-stabile next-generation products.

Dr. Reddy’s Laboratories began researching donepezil as early as 02 April 2003, when it filed an Indian patent application on a new, more stable physical form (or “polymorph”) of donepezil. (see Exhibit A) Dr. Reddy’s Laboratories called this new polymorphic form “Form IV.” A year later, Dr. Reddy’s Laboratories filed an analogous patent application in The United States of America.

Another manufacturer involved in donepezil research is USV, Limited. USV is a drug manufacturer headquartered in Mumbai, India. USV is, however, much smaller than Dr. Reddy’s Laboratories. With a 2006 Operating Income of approximately US$ 19 million, USV is approximately one-tenth the size of Dr. Reddy’s Laboratories.

USV also succeeded in discovering donepezil Form VI and began to pursue a patent on this. USV, however, soon encountered three significant challenges. First, USV’s India-based patent consultant did not file the USV patent application until 28 June 2004 - more than a year after Dr. Reddy’s Laboratories had filed its own patent application. This presented a challenge because in general, the company who files their patent application first is presumed entitled to the patent, even if the difference is only one day.

Second, the patent application filed on behalf of USV by the India based consultant received an adverse review. The Patent Examiner (at the European Patent Office) noted that Eisai Co., the company which invented Aricept®, had published several prior patents on donepezil. The Patent Examiner concluded that the international patent application was barred by at least two of Eisai Co.’s prior patents. The European Patent Examiner concluded that USV was not entitled to a patent at all.

Third, the International patent application was directed to one specific variety of Form VI. Being so limited, the International patent application would not cover other varieties of Form VI. Thus, even if the European Patent Office Examiner’s objections were overcome and the patent eventually issued, that patent would not cover the donepezil Form VI version made by Dr. Reddy’s Laboratories. This would leave Dr. Reddy’s Laboratories free to sell a competing Form VI product in the U.S.A.

Pharmaceutical Patent Attorneys LLC evaluated the patent application to determine whether the problems encountered before the European Patent Examiner could be avoided in the United States. To do so, Pharmaceutical Patent Attorneys LLC made a thorough review of the prior proceedings involving the International Patent Application, to determine their legality. Pharmaceutical Patent Attorneys LLC also made a thorough review of the prior scientific research in this area, to more precisely ascertain what the scientists had in fact invented.

Based on this review, Pharmaceutical Patent Attorneys LLC drafted and filed an Amendment to the pending United States patent application. The Amendment proposed changes which appear quite minor, yet are critical in creating value for the resulting patent. This Amendment modified the United States patent so that it avoided the problems with the earlier Eisai Co. patents. Significantly, however, this Amendment did not narrow the USV patent; to the contrary, the Amendment broadened it, so that it would properly cover donepezil Form VI in all its variations, including the one made by Dr. Reddy’s Laboratories and, within a year, granted USV its broader patent.

USV obtained its patent quite swiftly, compared to Dr. Reddy’s Laboratories. Despite filing its application more than a year after Dr. Reddy’s Laboratories, USV obtained its patent before Dr. Reddy’s Laboratories. To the contrary, a review of The United States Patent Office Examiner’s final review of the Dr. Reddy’s Laboratories application shows that the United States Patent Office is not disposed to granting Dr. Reddy’s Laboratories’ application at all. Thus, while USV filed its patent application a year after Dr. Reddy’s Laboratories, USV overcame this one-year handicap to obtain the patent first.

Also, the USV patent is extremely broad. It is broad enough to cover donepezil Form VI in all of its variations. Thus, while Dr. Reddy’s Laboratories won the race to the Patent Office, USV nonetheless won a patent broad enough to preempt the competitive Dr. Reddy’s Laboratories product.

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