United Therapeutics Defeats Preliminary Injunction Motion In Litigation With Sandoz And RareGen
U
nited Therapeutics Corporation (Nasdaq: UTHR) announced that on January 29, 2020, the United States District Court for the District of New Jersey issued a decision in favor of United Therapeutics and Smiths Medical ASD, Inc. denying the request for preliminary injunction sought by Sandoz Inc. and RareGen, LLC in pending antitrust litigation.
According to the Court, [Sandoz and RareGen] have not met their burden of demonstrating a reasonable probability of eventual success in the litigation. The unsealed opinion was just released by the Court.
By way of background, United Therapeutics and Smiths Medical ASD, Inc. were named as defendants in a lawsuit filed in federal court by Sandoz and RareGen on April 16, 2019. The lawsuit alleges that United Therapeutics engaged in anticompetitive conduct in connection with efforts by Sandoz and RareGen to launch their generic version of Remodulin (treprostinil) Injection. The claims center around access to both Smith Medical's CADD-MS3 pump, which is used for the subcutaneous delivery of Remodulin, and to the cartridges used with the pump. Smiths Medical decided in 2014 to discontinue the pump and related cartridges, and in response, United Therapeutics invested millions of dollars to fund production of additional pumps and cartridges for its patients. Sandoz and RareGen allege that United Therapeutics' purchase of these additional cartridges for Remodulin patients constitutes a violation of antitrust law. Following expedited discovery in the litigation, Sandoz and RareGen filed a motion seeking a preliminary injunction to obtain the cartridges that were produced by Smiths Medical under the supply agreement with United Therapeutics.
In finding that Sandoz and RareGen failed to demonstrate they were likely to prevail in the litigation, the Court noted that Sandoz and RareGen produced no evidence UTC's purchase of [the cartridges for the CADD-MS3 system] was motivated by or intended to forestall Sandoz's entry into the subcutaneous market. Rather, United Therapeutics made a significant investment under an agreement with Smiths Medical that ensured the CADD-MS3 pump would continue to be available to deliver Remodulin for a period of time after Smiths Medical announced discontinuation of the pump.
The Court noted that the agreements between Smiths Medical and United Therapeutics, which made more cartridges available than would otherwise exist, were in fact procompetitive. The Court's opinion noted The Court is persuaded from the wording of the original 2016 Pump Supply Agreement that UTC's concern was not keeping Sandoz out of the market for treprostinil, but rather with ensuring continuity of supplies of pumps and cartridges for its customers at a time when there were no other treprostinil competitor, and that the exclusive nature of this production agreement was contemplated from inception.
The Court also found that Sandoz was aware or should have been aware of CADD-MS 3 problems as early as May 2016. Yet Sandoz failed to take action to ensure delivery means for its own patients.
In addition to United Therapeutics' investment in additional cartridges, United Therapeutics continues to innovate and develop new and improved systems to deliver this therapy. If Sandoz and RareGen had taken the same care, they could have been able to serve their patients rather than resorting to litigation in an effort to remedy their own poor planning.
The Court also denied United Therapeutics' and Smiths Medical's motion to dismiss the entire action, so the case may continue to be litigated. Nonetheless, this decision is an important milestone in vindicating United Therapeutics' belief that the claims against it are meritless.
✔️ United Therapeutics Defeats Preliminary Injunction Motion In Litigation With Sandoz And RareGen
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