[Invest&Law] Impact of UK Ruling in Merck vs. Halozyme Patent Dispute on Korean Alteogen

Merck, Equipped with Alteogen's Technology, in Legal Battle with Halozyme
UK Court: "No Basis for Halozyme's Infringement Claim"
Focus on Impact on Lawsuits in Germany and the United States

As a UK court has ruled that "Halozyme's patent infringement claim is groundless" in the patent dispute between global pharmaceutical company Merck (MSD) and Halozyme, attention is also focusing on the moves of Korean bio company Alteogen, which provided its platform technology to Merck.

According to Shinhan Investment & Securities on the 24th, research analyst Um Minyong stated in a recent report, "For the first time in the UK, a judge's opinion has moved in a direction favorable to Merck," adding, "This is expected to have a positive impact on future main proceedings in the UK, as well as on patent rulings in Germany and other parts of Europe, and in the United States."

Halozyme: "Alteogen's technology infringes our patent"...Merck files for invalidation

Earlier, Merck developed a subcutaneous (under-the-skin) injection version of its own anticancer drug Keytruda, called "Keytruda SC." The drug, which had originally only been administered intravenously, was turned into a subcutaneous injection by incorporating Alteogen's platform technology "ALT-B4." ALT-B4 is an enzyme (a hyaluronidase technology) that temporarily loosens subcutaneous tissue to help the drug be rapidly absorbed into the body.

However, the US company Halozyme claimed that "the Alteogen technology used in Keytruda SC infringes our patent," which escalated the dispute. In August last year, Merck filed a petition with the UK Patents Court seeking a ruling that two of Halozyme's European patents are invalid, and Halozyme responded with a counterclaim.

The UK court found that "Halozyme's statement did not contain the key evidence required by the court." Among the multiple enzyme sequences listed in its own patent, Halozyme failed to specify which sequence corresponds to ALT-B4, and it also did not clarify the comparative conditions underlying its claim that the enzyme's stability had been improved. Although the court granted a six-week period to supplement the submission, Halozyme ultimately failed to do so, and all of its applications for an extension of the deadline and for leave to appeal were rejected.

Could the German sales ban be overturned?...US ruling expected before June

Regarding this ruling, Um commented, "The enzyme modification site claimed by Halozyme is completely different from the modification site of Alteogen's ALT-B4, so there is no possibility of patent infringement," adding, "It is significant that the court officially took issue with additional defects, namely the lack of inventiveness of the preservative-related technology (how much it is new compared with prior art) and the failure to present an actual example of the invention."

The potential impact on the German lawsuit is also a key point to watch. The Munich District Court in Germany granted a preliminary injunction last December to ban sales of Keytruda SC, but the UK ruling that "there is insufficient basis for infringement" on the same patents has opened up the possibility of overturning the German decision. Um analyzed, "Based on the 'preliminary opinion' in the patent invalidation proceeding filed by Merck, the likelihood of the German injunction being lifted is high." In the United States, a patent invalidation trial also began in June last year, and a decision is expected to come before June this year.

Meanwhile, even after the patent issue arose, Alteogen has continued to sign technology transfer agreements with companies such as Daiichi Sankyo, AstraZeneca (2.2 trillion won), and GSK (390 billion won). Um added, "These contracts are being signed for core products of each partner company, for which patent issues absolutely must not arise," and "This indicates that big pharma companies, through their own legal reviews, are assessing the patent risk as low."