[Edaily Reporter KIM SAE-MI ] Alteogen Inc.(196170): Judgments in the U.S. and Europe are diverging in the global patent dispute surrounding "ALT-B4," a technology for converting Keytruda into a subcutaneous (SC) formulation.

In the U.S., partner company Merck (MSD) has been successfully invalidating a series of related patents held by competitor Halozyme, but in Europe, rulings have upheld the validity of the patents and found infringement. In particular, the fact that a patent invalidated in the U.K. was deemed valid in the Netherlands has increased uncertainty regarding the European commercialization of “Keytruda SC,” which incorporates Alteogen Inc. technology.

Sales Ban in 8 Countries Following Germany… Setback for Keytruda SC’s Commercialization in Europe

On the 7th (local time), U.S.-based Halozyme announced that the Patent Court in The Hague, Netherlands, had upheld the validity of its European patent EP 2,797,622 (EP622) related to MDASE and ruled that MSD’s Keytruda SC infringes on that patent.

Consequently, the Dutch court issued an order to MSD BV, MSD’s European marketing authorization holder, prohibiting the manufacture, sale, import, and stockpiling of Keytruda SC in eight countries: Belgium, Denmark, France, Ireland, Italy, Sweden, Switzerland, and the Netherlands. The court also prohibited other MSD affiliates from supporting patent infringement by utilizing the European marketing authorization.

This ruling stems from an expedited main proceedings (VRO) that addressed the validity of EP622 and whether it had been infringed. MSD argued that the patent was invalid and that Keytruda SC did not infringe it, but the court rejected these claims.

The core of this patent dispute is Alteogen Inc.’s ALT-B4. Keytruda SC is a product that applies ALT-B4 to pembrolizumab, the active ingredient in the existing intravenous (IV) formulation. ALT-B4 is a hyaluronidase enzyme that helps the drug be rapidly absorbed into subcutaneous tissue. Halozyme claims that ALT-B4 infringes on its patent related to the modified PH20 hyaluronidase.

Previously, a German court also issued a preliminary injunction in December of last year prohibiting the launch of Keytruda SC. With the addition of this Dutch ruling, legal restrictions on the commercialization of Keytruda SC have intensified in the nine European countries where EP622 is in effect.

The size of the affected market is also significant. According to market research firm Grand View Research, the European Keytruda market was estimated to be approximately $8.711 billion (about 11.7 trillion won) last year. This represents 27.5% of the $31.68 billion (42.45 trillion won) in global Keytruda sales reported by MSD for last year. Based on the simple assumption that 30% of existing IV sales would shift to the SC formulation and that the selling price would remain the same, calculations suggest that annual SC sales in Europe could reach approximately $2.613 billion (3.5 trillion won).

Keytruda SC received European approval last November, and commercialization has been proceeding on a country-by-country basis. According to a Dutch court ruling last July, MSD’s Swedish subsidiary listed Keytruda SC as “available for sale” in the local drug database on May 11. It was also confirmed that the Danish subsidiary posted the sales price on a local drug pricing website on the same day. A product guide for healthcare professionals provided by MSD Sweden also explicitly stated that Keytruda SC had been available since June 1.

While the immediate impact on the royalties Alteogen Inc. is set to receive is expected to be limited, the key issue is how long the delay in the European launch will last.

Victory

in 7 U.S. PGR Cases… Same Patent Invalidated in the U.K.

It is noteworthy that patent disputes surrounding the same technology are yielding conflicting outcomes across different countries. In particular, while MSD has consistently gained the upper hand in the U.S., it appears to be struggling in Europe.

MSD secured favorable rulings in 7 out of 14 post-grant review (PGR) cases related to Halozime’s MDASE patent filed with the U.S. Patent Trial and Appeal Board (PTAB), for which hearings have begun.

MSD has focused its attacks on the lack of sufficient disclosure in the U.S. to support the scope of Halozyme’s patents. The PTAB ruled that some of the relevant patents failed to meet the written description and enablement requirements. In essence, the PTAB found that the description of the invention and the basis for actually implementing it were insufficient relative to the scope of the patent claims.

A favorable outcome for MSD was also reached in the United Kingdom. Last May, Halozyme agreed to the revocation of the UK portion of EP622. The UK court had required Halozyme to provide specific grounds for patent infringement but determined that Halozyme had failed to present sufficient evidence. It is noteworthy that EP622 is the same European patent for which the Dutch court recently upheld both validity and infringement.

The differing outcomes in the UK and the Netherlands regarding the same European patent are attributed to the fact that patent proceedings are conducted independently in each country, and litigation procedures and the evidence submitted vary. A representative of Alteogen Inc. explained, “Patent law is governed by each country’s domestic legislation, so a decision in the U.S. does not necessarily affect other countries,” adding, “Situations vary by country—for example, a patent that was invalidated in the UK was upheld in the Netherlands.”

Previously, in July, a Dutch court dismissed an application for a preliminary injunction filed by Halozyme. However, that decision did not address the validity of the patent or whether infringement had occurred; rather, it dealt with whether MSD’s statements regarding the product launch were legally binding, making it a separate proceeding from this final judgment on the merits.

At the time, Halozyme argued that MSD had breached its prior commitment by taking sales-related actions in Denmark and Sweden after stating in court filings that it would not pursue a European launch. However, the court ruled that MSD’s statements could not be construed as a legally binding promise to Halozyme to refrain from launching the product and dismissed the motion for a preliminary injunction.

MSD Objects to Dutch Ruling… Possibility of Reversal if Appealed

MSD is strongly objecting

to

this

ruling

. An MSD spokesperson stated, “We strongly oppose the Dutch court’s decision on the cross-border injunction.” MSD maintains that Halozyme’s patent is invalid worldwide and that the infringement claims are baseless. MSD is currently reviewing its next legal steps.

The key issues moving forward are whether MSD will appeal and how long the delays in European launch and sales will last. Since the expansion of global sales of Keytruda SC is linked to Alteogen Inc.’s royalty revenue, any delay in entering the European market could impact its projected future earnings.

The company is currently awaiting MSD’s response. A representative of Alteogen Inc. stated, “We are monitoring what legal action MSD will take,” but added, “We do not yet have an official position.”

Some observers have suggested that if MSD files an appeal, there is a high likelihood the ruling could be overturned. Shinhan Investment Securities’ Research Center noted, “This is an unusual ruling—finding infringement in the Netherlands of the EP622 patent that was invalidated in the UK,” and predicted, “We expect Halozyme will ultimately fail to present concrete grounds for infringement, and that the Netherlands and Germany will reach the same conclusion as the UK.”

Meanwhile, Keytruda SC has been sold in the U.S. since last September under the name “Keytruda QLEX.” Sales, which stood at $128 million (172 billion won) in the first quarter of this year, increased 3.6-fold to $463 million (620 billion won) in the second quarter, indicating that the product is rapidly gaining a foothold in the market.