Alder BioPharma (ALDR) Updates on CGRP Antagonist Patent Suit vs. Teva's (TEVA) Labrys Biologics

November 21, 2016 4:09 PM EST

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Alder BioPharma (NASDAQ: ALDR) disclosed the following in a U.S. SEC filing on Monday:

Item 1.01 Entry into a Material Definitive Agreement

Lease Amendment

On November 18, 2016, Alder BioPharmaceuticals, Inc. (“Alder”) entered into a Fifth Amendment to Lease (the “Fifth Amendment”) with KBS North Creek LLC, as successor-in-interest to RREEF American REIT II Corp. KK, to amend certain provisions of the Lease by and between Alder and RREEF American REIT II Corp. KK, dated August 5, 2005, as previously amended (the “Original Lease”).

The Fifth Amendment (i) extends the term of the Original Lease by an additional 60 months through July 31, 2023, (ii) expands the premises covered by the Original Lease, beginning on or about February 1, 2017, (iii) provides Alder with an option for future expansion, and (iv) changes the rental rate, which together with the term extension, results in incremental rent obligations of an aggregate of $7.8 million for the duration of the Original Lease, as amended by the Fifth Amendment.

The foregoing description of the Fifth Amendment is a summary, is not complete, and is qualified in its entirety by the terms and conditions of the actual Fifth Amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 8.01 Other Events.

Decision in Opposition Proceeding in European Patent Office

Alder is reporting an outcome in its opposition to Labrys Biologics Inc.’s (owned by Teva Pharmaceutical Industries Ltd.) European Patent No. 1957106 B1. The patent at issue, granted in October 2013, originally contained claims relating to calcitonin gene-related peptide (“CGRP”) antagonist antibodies and the use of such CGRP antagonist antibodies in human therapy for the prevention or treatment of CGRP-associated vasomotor symptoms such as migraine and hot flush. The opposition to the patent was filed in July 2014 by both Alder and Eli Lilly and Company. The opposition asserts that the patent be revoked in its entirety because the patent’s broad claims do not meet the requirements for patentability under the European Patent Convention. In an oral proceeding held in Munich, Germany on November 18, 2016, the Opposition Division (“OD”) of the European Patent Office (“EPO”) issued a ruling revoking all claims in the patent relating to CGRP antagonist antibodies and maintaining but narrowing claims relating to the use of CGRP antagonist antibodies in human therapy to the prevention or treatment of headache such as migraine and cluster headache. The written decision consistent with the oral ruling is expected within a few weeks.

The initial decision by the EPO affirms Alder’s right to continue clinical development of ALD403, Alder’s drug candidate for the prevention of migraine, and has no impact on Alder’s plan to submit a Biologics License Application (“BLA”) for ALD403 with the U.S. Food and Drug Administration (“FDA”) in the second half of 2018 and to commercialize ALD403 in the United States. The OD’s decision is subject to appeal to the EPO’s Technical Board of Appeal by the parties to the proceeding. Alder plans to pursue an appeal based on its continued firm belief that the patent claims that were maintained and narrowed were nevertheless improperly granted by the EPO and upheld by the OD, and should be revoked in its entirety on appeal for the reasons set forth in the opposition. The OD decision has no binding effect on the U.S. Patent and Trademark Office’s patentability determination of claims in granted or pending Labrys patent applications in the United States which correspond to the opposed European patent or impact on Alder’s ability to take action seeking to invalidate such granted or pending U.S. applications.

For the reasons set forth in Alder’s opposition, Alder continues to firmly believe the patent should be revoked in its entirety. However, Alder cannot predict the specific timing or outcome of events or matters discussed in this Current Report on Form 8-K, or the impact of the November 18, 2016 decision on Alder’s business. Because of the inherent uncertainty in intellectual property legal proceedings, the opposition proceeding and appeal may not ultimately be resolved in Alder’s favor regardless of Alder’s perception of the merits. If Alder loses such a proceeding or appeal, Alder may not be able to engage in commercialization and related activities for ALD403 for the treatment of migraine in the European countries that are members of the European Patent Organisation without obtaining a license. However, such license may not be available on commercially reasonable terms or at all, and if granted may be non-exclusive, thereby giving Alder’s competitors freedom to operate in these countries. If Alder is found to infringe the patent in these European countries, Alder could be forced, including by court order, to cease commercialization and related activities for ALD403 in such countries and possibly be found liable for monetary damages and attorneys’ fees.



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