Teva Pharmaceuticals sued Jazz Pharmaceuticals (NASDAQ: JAZZ) over the patents for the cannabis drug Epidiolex which is used to treat rare pediatric epilepsy conditions known as Lennox-Gastaut syndrome, Davaut syndrome, and tuberous sclerosis complex. However, a judge has rejected the argument that Jazz wasn’t truthful when applying for the patents.
Epidiolex got its start with a company called GW Pharmaceuticals. The company was instrumental in legalization efforts as it was able to successfully steer a cannabis-based drug through rigorous FDA study trials. Epidiolex is the only FDA-approved prescription CBD medicine, which is a plant-based, highly purified form of CBD. It was studied for three years and the company claims 40,000 families are using the drug.
Jazz Pharmaceuticals bought GW Pharmaceuticals in 2021 in a deal valued at $7 billion. Since then Jazz Pharmaceuticals has reposted almost a billion in total revenue each quarter. For the quarter ending in September 2023, Jazz reported $213 million in sales for Epidiolex. The drug has been popular with patients who had few choices.
At the end of 2022, Teva, along with several other companies filed for a generic version of Epidiolex (cannabidiol) oral solution. Jazz followed that with its own patent infringement lawsuit in January 2023 against the group. The group fired back saying they weren’t infringing on the patents, while alleging improper listing of the patents. Jazz then filed another lawsuit saying it had a newly-issued patent regarding the method of treatment for Epidiolex and that these companies were infringing on the new patent as well. jazz asked the FDA not to approve the generic requests until the patent dates ended.
According to Jazz’s filings, in October 2023, it settled with Padagis US LLC and granted Padagis a license to manufacture, market, and sell its generic version of Epidiolex on a date that depends on the occurrence of certain other events. However, the settlement wasn’t with the remaining litigants.
The remaining pharmaceutical companies claimed that Jazz wasn’t truthful in its patent filings by claiming the company had less than 500 employees also described as a “small entity.” Such a description results in lower fees for patent filing. On January 11, the judge issued an opinion disagreeing with the “small entity” claim and dismissed the counterclaim.
The judge noted that the claims that Jazz had over 500 employees were based on guessed estimates. Jazz claimed that during that time, the company had 492 employees and was truthful in saying it was less than 500.