Trial opens in patent dispute over Lilly drug

INDIANAPOLIS - Eli Lilly & Co. opened its defense in federal court Monday of its patent on the company's top-selling drug, saying its discovery came after years of difficult research.\nThree generic drug manufacturers are seeking to have Lilly's patent on Zyprexa, an anti-psychotic introduced in 1996 to treat schizophrenia, that has sales of about $4 billion a year declared invalid.\nThe companies challenging the patent argue discovery of the drug's molecular structure was obvious and a previous Lilly patent covered it. The companies also claim Lilly mislead the patent office and omitted certain test results when applying for the patent.\nLilly lawyer Charles Lipsey said the active molecule in Zyprexa was not an obvious discovery because many drug companies were trying to find an anti-psychotic drug that would not give patients the side effects of other schizophrenia medications.\nHe questioned how the drug could be obvious if so many companies, including Lilly, tried numerous versions without positive results.\n"Lilly was right there failing with everybody else," Lipsey said.\nIndianapolis-based Lilly is hoping to avoid a legal loss similar to one four years ago when it lost a patent challenge to its former top-selling drug, Prozac.\nThe generic drug makers -- Zenith Goldline Pharmaceuticals, owned by Ivax Corp. of Miami -- Indian drug maker Dr. Reddy's Laboratories; and the U.S. arm of Israel-based Teva Pharmaceutical Industries -- claim Lilly knew about the Zyprexa compound for years and included it in a patent that expired in 1995.\nThe generic companies claim that by the time Lilly was ready to market Zyprexa, time was running out on the first patent so it decided to apply for a second one, which violates patent rules.\n"The patent should have never been issued," said Thomas Heneghan, an attorney for Zenith Goldline Pharmaceuticals. "Lilly did not invent anything."\nZyprexa's patent was issued in 1993, giving Lilly exclusive U.S. rights on the drug until 2011.\nAt issue is a molecule called olanzapine shaped like a seven-sided ring. Previous medications featured a similar ring with various atoms, like fluorine or chlorine, attached.\nLipsey, however, said discovering olanzapine -- the generic name for Zyprexa -- was not as easy as chopping off the attached atoms.\n"That's not the way the chemistry works," Lipsey said, adding that "nobody in a million years" would have ever started research with a molecule lacking the additional atoms.\nWhen Lilly lost the Prozac patent, it triggered a slide in Lilly's fortunes as less expensive generic versions of the anti-depressant hit the market in late 2001 and captured most of Prozac's market share.\nZyprexa, which accounts for about a third of Lilly's revenues, accounts for greater sales than Prozac ever reached.\nThe bench trial before U.S. District Court Judge Richard L. Young is expected to last three weeks, and an appeal of his decision is expected, regardless of his ruling.\nLilly shares fell 57 cents to close at $68.89 on the New York Stock Exchange.