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`How Abeie has won the Humira fight—so far
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`By Kristen Schorsch and J. Duncan Moore Jr. November 05, 2016
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`At Abeie, there's no doomsday scenario talk despite a looming expiration date on Humira, the best-selling
`drug in the world. That's because the company is a case study in the lengths a pharmaceutical giantwill go to
`protect its blockbuster.
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`The main patent on Humira expires at year-end. That's essentially Abeie's first line ofdefense, but it still has
`at least 75 other patents that protect the drug, with various expiration dates stretching through 2032.
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`"Humira is a good example ofa company that builta very substantial wall," says Kevin Nelson, a Chicago-
`based partner at Duane Morris who specializes in intellectual property law.
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`Thatwall aims to shelter Abeie from rivals that are developing their own versions of Humira and racing to
`chip away at the dominance ofthis lucrative drug. Humira raked in $14.01 billion last year.
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`The brewing battles are fueled by a new era of competition in the pharmaceutical industry. Companies are
`developing biosimilars, or similar versions of brand-name drugs, that aim to be more affordable. The federal
`governmentdidn't create an approval process for biosimilars until the Affordable Care Act of 2010, and U.S.
`regulators have approved only four so far.
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`North Chicago-based Abeie inherited its blockbuster drug when it spun off from Abbott Labs in 2013.
`Humira can be used to treat a variety ofautoimmune conditions, including Crohn's disease and rheumatoid
`arthritis. The drug is the heart ofAbeie's business, generating 61.3 percent ofAbeie's total net revenue last
`year. Humira sales are projected to rise to $18 billion in 2020.
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`Representatives for Abeie did not respond to messages seeking comment. But experts say the $22.86 billion
`company will cocoon Humira by tying up competitors in expensive and lengthy court battles. Abeie will use
`its patents, which protect everything from how the drug is manufactured to formulations and methods of
`treatment—for example, by injection—as leverage to seek injunctions to block biosimilars from entering the
`market.
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`LONG LEGAL FIGHTS
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`Abeie has already sued one competitor for patent infringement. In an August lawsuit filed in U.S. District
`Court in Delaware, Abeie alleges that pharma giantAmgen, which has received federal approval for its
`Humira knockoff, "is speaking out of both sides of its mouth" because the company, based in Thousand Oaks,
`Calif, also has foughtto protect its patents against rivals. A spokeswoman for Amgen declines to comment.
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`The trial for Abeie and Amgen isn't scheduled to begin until 2019, highlighting how much time the fight can
`take. And more litigation could follow. A total of 10 companies are in the late stages ofdeveloping their own
`versions ofHumira, says Ashtyn Evans, a St. Louis-based health care analyst at Edward Jones.
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`When biosimilars eventually do hitthe market, they'll "certainly put pricing pressure on Humira, and it'll be kind
`ofa battle for market share," Evans says.
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`Some rivals are using another route to undercut Abeie. They've taken their fight to the federal patent
`office, which is deciding whether to strip Humira of some of its patent protection. The burden of proof is lower
`there than in court, making Abeie vulnerable, says Nelson, the Duane Morris lawyer.
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`While Abeie shells out potentially millions to defend itselfand keep rivals at bay, the company is essentially
`buying time to develop other products, analysts say, since Humira sales ultimately will decrease once
`biosimilars are available. Chicago-based Morningstar analyst Damien Conover says Imbruvica, a treatment
`for blood cancer with $5 billion in projected sales by 2020, is among promising drugs that could help offset
`Humira's potential losses.
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`Mylan v. Genentech
`IPR2016-00710
`Merck Ex. 1136, Pg. 1
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`Investors apparently agree. When federal regulators approved rival Amgen's version of Humira in September,
`Abeie's stock price barely wobbled.
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`But those losses aren't expected anytime soon. For now, Abeie is focused on protecting its crown jewel.
`Abeie CEO Richard Gonzalez recently expressed confidence abouttaking on any company thatwould
`threaten Humira's arsenal of patents, and signaled he would win. "We plan to enforce our (intellectual
`property) against anyone who attempts to enter the marketplace," Gonzalez told analysts during an Oct. 28
`call.
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`http://www.chicagobusiness.com/article/20161105/ISSU E01/311059994?tem plate= printart
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`Merck Ex. 1136, Pg. 2
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