U.S. judge William Bryson ruled that patents covering Allergan‘s (NYSE:AGN) Restasis medicine are invalid on the grounds of obviousness, driving the company’s shares down more than -6% in afternoon trading today.
Allergan told Reuters that it planned to appeal the ruling.
The drug brought in $1.5 billion in sales for Allergan last year, the newswire reported – more than 10% of the company’s revenue.
The court’s decision comes after Allergan made a deal with the St. Regis Mohawk Tribe in New York to transfer its Restasis patents in an attempt to halt any review by the U.S. Patent and Trademark Office. The tribe agreed to license the patents exclusively to the company in exchange for payments.
Both parties have argued that the tribe’s sovereign immunity render the patents outside of the trademark office’s power of review.
The deal struck a nerve around the pharmaceutical industry and with politicians. Sen. Claire McCaskill (D-MO) has since drafted a bill and a committee in the House of Representatives is investigating the deal.
Bryson called Allergan’s deal with the tribe a “ploy,” according to Reuters.
Last week, Allergan settled with one of the companies that was challenging its claim to patents covering Restasis. According to its settlement, InnoPharma can start selling a generic version of Restasis on Feb. 24,2024 – six months ahead of the scheduled expiration dates for Allergan’s patents.
The pharma giant added that it may grant InnoPharma permission to start selling an authorized generic supplied by Allergan starting on Aug. 28, 2024.