Transcript from the Record of Judgments

UNOFFICIAL OFFICE TRANSLATION

Transcript from the record of judgments

DECISION

given on 8 March 2010 in case FS 25583/2009

AstraZeneca AB

S-151 85 Södertälje

Sweden

and

AstraZeneca A/S

Roskildevej 22

2620 Albertslund

v

Sandoz A/S

Edvard Thomsens Vej 14

2300 Copenhagen S

The background of the case and the claims of the parties

70029208\1850906v1 * 9 March 2011

An Application for Injunction was filed with the Enforcement Court on 14 September 2009 and the case concerns the issue whether the defendant, Sandoz A/S, by its marketing in Denmark of a generic product containing a magnesium salt of esomeprazole, Esomeprazol "Sandoz", infringes the rights of the plaintiffs, AstraZeneca AB and AstraZeneca A/S, according to process patent no DK/EP 773940 ("the process patent in suit" or "the patent in suit"). Sandoz A/S has disputed during the case that Esomeprazol "Sandoz" is manufactured according to the process patented by the defendants. Sandoz A/S has claimed that Esomeprazol "Sandoz" on the contrary is manufactured by to the process according to Exhibit A1 which the plaintiffs have not claimed is infringing the process patent in suit.

The plaintiffs, AstraZeneca AB and AstraZeneca A/S, have finally submitted the following claims:

Primarily:

The defendant, Sandoz A/S, is enjoined in Denmark from offering for sale, putting on the market or using pharmaceutical products containing esomeprazole or pharmaceutically acceptable salts thereof as an active substance, which active substance has been produced according to the process used for the Esomeprazol "Sandoz" products marketed by the defendant and comprised by the defendant's marketing authorisations submitted as Exhibit 2, or importing or possessing such pharmaceutical products for such a purpose as long as patent no. DK/EP 773940, cf. Exhibit 26, as approved by the EPO following opposition, cf. Exhibit 27, is in force in Denmark.

In the alternative:

The defendant, Sandoz A/S, is enjoined in Denmark from offering for sale, putting on the market or using pharmaceutical products containing esomeprazole or pharmaceutically acceptable salts thereof as an active substance, which active substance has been produced according to the process used for the Esomeprazol "Sandoz" products marketed by the defendant in Denmark and comprised by the defendant's marketing authorisations submitted as Exhibit 2 manufactured by Hetero Drugs Limited, or importing or possessing such pharmaceutical products for such a purpose as long as patent no. DK/EP 773940, cf. Exhibit 26, as approved by the EPO following opposition, cf. Exhibit 27, is in force in Denmark.

The plaintiffs have further claimed that an injunction primarily be granted without security, in the alternative against security determined by the court.

The defendant, Sandoz A/S, has after its final claim submitted a claim that the injunction not be granted.

The decision does not include a complete statement of the case, cf. Section 218b of the Administration of Justice Act.

The information submitted in the case

This case has been separated from case no. FS 15299/2009 between the same parties in which the Enforcement Court on 15 January 2010, on the basis of an application for an injunction received on 17 June 2009, issued the following injunction in respect of Sandoz A/S:

"1. The defendant, Sandoz A/S, is enjoined in Denmark from offering for sale, putting on the market, or using pharmaceutical products containing magnesium salt of (-)-5-methoxy-2[[(4-methoxy-3,5-dimethyl-2-pyridinyl)-methyl]-sulphinyl]-1H-benzimidazole (esomeprazole) with an optical purity of ≥ 99.8% enantiomeric excess (e.e.) or importing or possessing the pharmaceutical products for these purposes for as long as Danish patent no. DK/EP 1020461, cf. Exhibit 5, is in force in Denmark.

2. The defendant, Sandoz A/S, is enjoined in Denmark from offering for sale, putting on the market, or using the pharmaceutical product Esomeprazol "Sandoz" comprised by the defendant's marketing authorisation with the d.sp.no. 25857, cf. Exhibit 2, or importing or possessing the pharmaceutical product for these purposes for as long as Danish patent no DK/EP 1020461, cf. Exhibit 5, is in force in Denmark.

The defendant, Sandoz A/S, is ordered to revoke deliveries of Esomeprazol "Sandoz" products comprised by the defendant's marketing authorisation with the d.sp.no.[1] 25857, cf. Exhibit 2, from all wholesalers and pharmacies to which the defendant has made deliveries.

The defendant, Sandoz A/S, is further ordered to request that its distributors in Denmark of Esomeprazol "Sandoz" products comprised by the defendant's marketing authorisation with the d.sp.no. 25857, cf. Exhibit 2, withdraw and return to the defendant the relevant deliveries of the pharmaceutical product in question from all wholesalers and pharmacies. "

Sandoz A/S has appealed the decision to grant an injunction in case no. FS 15299/2009 to the High Court of Eastern Denmark where the case is still pending. According to the information provided patent no. DK/EP 1020461 dealt with in that case expires in 2013. Sandoz A/S has informed that the products have been withdrawn from the Danish market.

The process patent in suit in this case, patent no. DK/EP 773940, was issued to AstraZeneca AB on 4 June 2003 by the European Patent Office ("the EPO"). The patent has been validated in Denmark. The patent has been maintained by the EPO's First Board of Appeal following opposition. Appeal proceedings are now pending before the EPO's Second Board of Appeal, in respect of the patent. According to the information provided the patent expires in 2015.

On 2 April 2009 Sandoz A/Z was granted a marketing authorisation (d.sp.nr. 25857) in Denmark for Esomeprazol "Sandoz". The product was entered in the Register of Authorised Products[2] on Monday 1 June 2009 and it has been sold in Denmark from 2 June 2009 and until the injunction of 15 January 2010. Sandoz A/S has stated during the proceedings that the marketing authorisation allows use of two manufacturing methods, ie the Hetero process, see below, and the Lek process respectively, but that only the first method is used by Sandoz A/S.

According to the information provided, esomeprazole in an optically active compound and the so-called S-enantiomer of the racemic pharmaceutical molecule omeprazole. According to the information provided optically active compounds such as eg omeprazole can basically be made in two different ways:

1.  by cleaving racemic compounds, which implies separation of enantiomers, normally by combining them with other optically active molecules, or

2.  by enatioselective synthesis, which implies direct manufacture of a specific enantiomer.

The plaintiffs have claimed during the proceedings that the latter process is clearly more effective as racemate cleavage at most provides a theoretical yield of only 50% (the other 50% is the wrong enantiomer) and that even this theoretical yield is never obtained in practice, and further that the possible yields for omeprazole are even lower due to omeprazole's sensititivity to the acid conditions in connection with conventional racemic cleavage methods.

It has not been disputed that by the process according to the patent in suit esomeprazole is produced by direct asymmetric oxidation of the sulphur atom in the precursor molecule pyrmetazole, also referred to as the omeprazole sulphide.

When using the process according to the Hetero process esomeprazole is produced by cleavage of the racemic compound of omeprazole.

According to claims 1-4 of the patent in suit the oxidation reaction takes place in an organic solvent with an oxidant in the presence of chiral titanium complex and possibly also a base. The use of a base is obligatory in claim 1, but optional in claims 2-4. Claims 1-4 are each independent claims representing different processes, while the other patent claims, 5-25, are dependent claims referring to one or several other claims, including one of the main claims.

The plaintiffs have stated that the chiral ligand used for the titanium complex is primarily a chiral alcohol such as a chiral diol. According to claim 11 in the patent the diol may be a branched or an unbranched alkyl diol. According to claim 12 esters of tartaric acid are preferred chiral diols and according to claim 13 diethyl-L tartrate or (-)-diethyl D-tartrate is particularly preferred. The plaintiffs have also stated that the oxidation according to claims 1-4 is carried out with an oxidant and that hydroperoxides turned out to be suitable oxidants for the asymmetric oxidation, for example tert-butyl hydroperoxide or cumene hydroperoxide and, according to claim 7, especially the latter. Furthermore is has been stated that when the asymmetric oxidation of pyrmetazole to esomeprazole is carried out according to a preferred embodiment of the process according to the patent in suit, the following reagents will be added at some point during the course of reaction:

(-)-diethyl D-tartrate

Cumene hydroperoxide

N,N-Diisopropyl ethylamine

Titanium(IV) alkoxide

The plaintiffs have claimed during the proceedings that during the subsequent workup procedure these starting materials are transformed into various degradation products which will leave trace quantities in the active substance of the drug (the final API) and possibly also in the finished tablets where they can be detected to the effect that the trace quantities of the starting materials will jointly form a kind of "fingerprint" in the chemical composition of the finished drug, making it possible to determine, based on an analysis of the finished drug, whether the active substance in the finished drug has been produced according to the patent in suit or not. The plaintiffs have claimed that "the fingerprint" consists of:

Titanium

Tartaric acid

2-phenyl-2-propanole

α-methyl styrene.

It has not been disputed by Sandoz A/S during the proceedings that the manufacture of esomeprazole by use of the process according to the patent in suit will leave traceable quantities of titanium, tartaric acid, 2-phenyl-2-propanole and α-methyl styrene in the finished drug. Sandoz A/S has, however, claimed that the presence of these substances in the finished product does not indicate that Hetero has used another process than the Hetero process for production of the active substance in Esomeprazole "Sandoz".

The parties agree that it can be taken into account that titanium is present in Esomeprazol "Sandoz" tablets and that it is not possible to see whether the titanium comes from the active substance in the core ("the API") or from additives. It appears from the submitted description of the composition of Esomeprazol "Sandoz" that titanium dioxide forms part as an additive in the tablet core and in the tablet coating.

Sandoz A/S has claimed during the proceedings that the possible presence of traceable quantities of 2-phenyl-2-phosphate and α-methyl styrene is similarly understandable from the large quantities of acetone that form part of the Hetero process (cf. Exhibits A1 and E). Sandoz A/S has further submitted that it has not been proved that 2-phenyl-2-propanole, α-methyl styrene and/or tartaric acid are present at all in Sandoz' API.

During these injunction proceedings the plaintiffs have not submitted that manufacture of esomeprazole according to the Hetero process patented by patent no. DK/EP 1740571 issued to Hetero Drugs Limited or by use of the process described in Exhibits A and A1 implies infringement of the process patent in suit. It is on the contrary submitted that the process illustrated by Exhibits A and A1 is not used by Hetero for manufacture of the substance that is present in Esomeprazol "Sandoz" in Denmark.

During these proceedings the plaintiffs have reserved their position on claiming infringement of the process patent in suit against Lek Pharmaceuticals, another Sandoz A/S supplier.

Statements

David Easterby, Professosr Steen Honoré Hansen, Professor Karl-Anker Jørgensen, Patent Agent Ulla Callesen Klinge, Dr. Tech. Jens Enevold Thaulov Andersen and Professor Jerzy Jaroszewski have given evidence during the case.

David Easterby has stated that he has a master's degree in chemistry, specialising in analytical chemistry. He has 42 years of experience in the field. He is head of a laboratory in London, SunChemical Security, that works as the analysis department for the SunChemical group and is a relatively new part of this group. The witness is also the European head of the analytical service in the group. The laboratory carries out many different examinations, eg in respect of forensic chemistry and food safety. They primarily carry out analytical tests of packaging for food in order to ensure compliance with European legislation. This work requires analysis of trace levels down to concentrations in the order of parts per billion ("ppb") or even lower. The laboratory recently set up a consultancy business and has started taking in work from customers outside the group. The laboratory is certified according to ISO-9208. The certification is administered by the British Institute of Standards and ensures that the laboratory has all procedures in place to maintain a high level of quality. The laboratory has further applied to UK Quality Service for accreditation according to ISO/17025. Three methods of analysis have been submitted, i.e. the methods of analysis for tartaric acid and titanium respectively used in these proceedings and a third method for testing of food. An audit took place in October 2009 in connection with which professionals reviewed the procedures of the laboratory. The audit report was published on 16 November 2009 and was very complimentary and recommended that SunChemical Security be accredited.

David Easterby stated that he came into contact with the plaintiffs through a colleague in SunChemical's North America office who had previously collaborated with the plaintiffs, in connection with which an external laboratory had been used. The plaintiffs subsequently became aware that SunChemical Security was also able to carry out analytical tests and arranged for the witness' North American colleague to call the witness, following which the laboratory was commissioned to carry out the tests described in Exhibit 28 ("the Sun report"). The plaintiffs requested that the laboratory develop methods for target analyses. For that purpose the laboratory received some provisional methods developed by the previously mentioned external laboratory and some physical products. They proceeded with improving the methods of analysis. They did not know which trace levels they could expect to detect but he did of course know that there would be residual material in the products. When they found that they had developed satisfactory methods of analysis for the plaintiffs, comparisons with determinations made by the undertaking's related laboratory in North America were carried out for validation purposes. The plaintiffs subsequently received a report on the methods of analysis.