Why SK and GC's deal for Xarelto exclusivity right misfired

Deal withdrawn after tentative agreement... unable to apply exclusivity rights due to difference in 'composition'

SK Chemicals's discussions with GC Pharma on handing over the exclusivity rights of Xarelto (rivaroxaban) had broken down in the end.

 

The reason is known to be that the scope of the patent avoided by SK Chemicals does not match the composition of the generic developed by GC Pharma.

 

According to industry sources on the 5th, the sale of the exclusivity rights of Xarelto between SK Chemicals and GC Pharma ended in misfire.

 

The two companies had been discussing selling the exclusivity rights of Xarelto.

 

GC Pharma's intent to enter the generics market 9 months earlier than other companies seemed to be in line with SK Chemicals's intent to sell its exclusivity rights.

 

However, the discussion ended in a misfire.

 

Officials from both companies stated, “It is true that there had been discussions, but the deal was broken off.” The industry points to the scope of a patent avoidance that SK Chemicals owns as the cause of the breakdown.

 

SK Chemicals, along with Hanmi Pharmaceutical, succeeded in avoiding the composition patent for Xarelto 2.5mg.

 

After winning the first trial in November 2015, the companies obtained the exclusivity right through the first Marketing Authorization Application (MAA) in July of the following year.

 

However, the scope of the exclusivity right the two companies have obtained was limited to the 2.5mg dosage.

 

The component patent of the remaining doses of Xarelto, 10mg, 15mg, and 20mg, had not been registered by Bayer in the first place.

 

When filing for patent avoidance of Xarelto's composition patent, the argument of SK Chemicals and Hanmi Pharmaceutical was that its "manufacturing process was different from the original.” The original tablet is manufactured through a wet granulation process after suspending rivaroxaban in a hydrophilic binder.

 

On the other hand, the generics developed by SK Chemicals and Hanmi Pharmaceutical are made by first spray drying the lactose hydrate and hypromellose+solvent solution into fine powder instead of granules, then adding excipients for tablet manufacturing, followed by compression and tableting.

 

The Intellectual Property Trial and Appeal Board (IPTAB) and the court acknowledged the significant difference in manufacturing and ultimately ruled that SK and Hanmi's generic does not violate the original’s scope of patent.

 

However, the problem was that this manufacturing method was different from the method used in the generic that was self-developed by GC Pharma.

 

As GC Pharma's generic was manufactured in a different way than the one that was acknowledged as 'different from the original drug' by IPTAB, GC Pharma would not be able to exercise the exclusivity rights even if they purchased it.

 

So, GC Pharma either had to develop a new generic with the method through which SK Chemicals avoided the original patent or give up the deal.

 

GC Pharma's decision was to give up the deal.

 

“The two companies started negotiations without specific knowledge of the scope of the exclusivity right, so the deal eventually ended up nowhere,” explained a pharmaceutical industry official.

 

On whether to proceed with the sale of exclusivity rights of Xarelto with other companies, an official from SK Chemicals said, “We haven’t yet made other deals after discussions with GC Pharma had broken down.” According to the pharmaceutical market data research firm UBIST, the outpatient prescription sales of Xarelto recorded 50 billion won last year.

 

This was a 1% decrease from the 50.8 billion won in 2019.

 

In the first quarter of this year, 11.9 billion won worth was sold.

 

In the new oral anticoagulant (NOAC) market, Xarelto stands in second place after Lixiana and is followed by Eliquis and Pradaxa.