For the Record: Acambis lays out strategy for fighting all legal actions filed by Bavarian Nordic with regard to smallpox vaccine MVA.
Below is the full, unedited relevant extract from the statement by the Chairman, Alan Smith (pictured) in Acambis' 2005 financial result report released to the London Stock Exchange on Thursday 9th March, 2006 that outlines how vaccine maker Acambis proposes to deal with legal actions relating to its attenuated smallpox vaccine MVA.
The vaccine is potentially a major product. Together with its co-development partner, Baxter Healthcare SA (Baxter), Acambis submitted a bid for a US Government stockpiling contract for MVA in October 2005. This was in response to a Request for Proposals (RFP) issued by the Department of Health and Human Services. The RFP is for the manufacture of up to 20 million doses of MVA attenuated smallpox vaccine and advanced clinical testing up to and including obtaining a product licence. It also includes options for the purchase of up to 60 million additional doses of MVA and warm-base manufacturing over the longer term.
Extract from Summary
As we have previously reported, we are now in a litigation process relating to MVA as a result of complaints filed against us by Bavarian Nordic (BN) in the US in August 2005. A further suit was filed in Austria in February 2006. BN alleges that we have used its trade secrets in the development of our MVA3000 vaccine and that we are infringing its patents.
We strongly believe these allegations are without foundation and we are vigorously defending our position. Today, we are outlining elements of our strategy to provide an insight into our view of the litigation".
Extract from body of the statement
MVA litigation: confident of ability to defend freedom to operate
We are continuing vigorously to oppose any and all legal actions filed by Bavarian Nordic (BN) with regard to MVA.
In February 2006, BN filed a suit against Acambis in Austria. This follows complaints lodged with the International Trade Commission (ITC) and District Court of Delaware in August 2005. Although Acambis has not yet been served with the writ in the Austrian action, it is our understanding that the complaint filed with the Commercial Court in Vienna alleges infringement of a European patent awarded to Bavarian Nordic in December 2005. The European patent appears to claim technology similar to BN's US patents, which are in dispute in the US litigation.
The extensive discovery process for the ITC closes tomorrow, 10 March 2006.
Having completed the fact discovery process and obtained the opinions of experts in the field, we are now outlining elements of our strategy to counter BN's claims. The evidence listed below is based on information in the public domain and is not derived from BN or other proprietary information protected from release by the ITC. Further arguments will be presented to the ITC that, for reasons of commercial sensitivity and by order of the ITC, are not being made public and that, in several cases, are known only to outside counsel. Based on current timelines, we expect to present our case in its entirety to the ITC at a hearing scheduled for May 2006.
BN's legal actions include claims that relate to patents, trade secrets and misappropriation. As illustrated below, Acambis will present evidence that each of these allegations is without merit.
Patents
We have always believed and continue to believe that any patents awarded or pending do not restrict our freedom to operate in the field of MVA. BN's patents claim that other MVA viruses replicate in human cell lines but that its MVA vaccine, MVA-BN, is "characterised by the loss of its capability to reproductively replicate in human cells". Acambis' view is that BN's patents are invalid and unenforceable. We will present factual and expert evidence that:
• MVA-BN is not novel;
• the patent is unenforceable through lack of enablement;
• BN failed to provide the US Patent and Trademark Office with prior art related to its patent claims; and
• the patents rely on scant scientific evidence.
We will demonstrate that MVA-BN is not novel because all MVA viruses, including MVA-BN and prior art strains, have similar replication characteristics.
We would also point out that, under an "Authorisation and Consent" clause in our contract, Acambis is authorised by the US Government to research and develop our MVA regardless of third-party US patents to the extent necessary to perform the NIAID contracts.
Trade secrets
On the question of the use of trade secrets, we will present evidence that the information provided at a meeting between Acambis and Bavarian Nordic in June 2002 was not secret and, in any case, has not been used by Acambis. In developing MVA3000, we have called upon our own experience, gained through the ACAM2000 programme, and the experience of our partners, including using established manufacturing practices. We have also used information gleaned from the many articles published on MVA over the last 30 years, including those from Dr Anton Mayr (see below). In addition, key parameters for the programme were set by the NIAID, including dose level and dosing schedule.
Misappropriation
Dr Mayr provided an MVA strain to the NIH/NIAID. The NIAID then provided a version of that strain to Acambis for use as the basis of MVA3000. As referenced by an attorney at the ITC in a letter last September, Dr Mayr did not place in writing any restriction on the NIH's use of the transferred MVA virus. We will present further evidence that Dr Mayr did not restrict the use of the MVA strain he provided to the NIH.
When the NIH released its first RFP, it made the NIH MVA strain publicly available, stating that "collaborative opportunities from NIAID are available to all legitimate parties and include: the availability of a master seed stock of MVA from NIAID...". We requested and received the NIH MVA under a Material Transfer Agreement that granted Acambis "worldwide, non-exclusive rights to make, have made, and use" the NIH MVA "to sell and have sold, and to offer to sell Commercial Products in the Field of Use of Smallpox Vaccines". During the procurement process for the first MVA contract, although it did not undertake a comprehensive review of intellectual property in the MVA field and encouraged us to undertake our own analysis, the NIAID stated that "prior to distribution of the material NIAID determined that it is within its rights to transfer the material to other parties".
Opposition to European patents
As part of our broader strategy, we plan to file oppositions to the patent issued to BN by the European Patent Organisation (EPO) on 28 December 2005. Under the EPO's review process, there is a period of nine months from the date of issuance for companies to submit objections to the patent.
When BN initiated the litigation process in August 2005, it stated at the time that it was seeking to "...stop Acambis from engaging in the importation of.....MVA smallpox vaccine products into the USA". BN's intent is clearly to disrupt and frustrate competition in the MVA procurement process, both in the US and elsewhere. We are, and always have been, very confident of our ability to counter BN's allegations and will vigorously defend our freedom to compete for, and win, these important procurements.
9th March 2006
