By Jonathan Stempel
(Reuters) - A U.S. appeals court on Wednesday upheld two patents for Amgen Inc's multibillion-dollar rheumatoid arthritis drug Enbrel in a defeat for Novartis AG, which has been trying to sell its own version.
The 2-1 decision by the U.S. Federal Circuit Court of Appeals in Washington, D.C. gives Amgen 31 years of exclusive rights to Enbrel, with protection for the patents extending to November 2028 and April 2029.
Sandoz, a unit of Switzerland-based Novartis, said it may ask the U.S. Supreme Court to review the decision, which upheld an August 2019 ruling by a federal judge in New Jersey.
In early afternoon trading, Amgen shares were up $16.28, or 6.9%, at $252.14 on the Nasdaq.
Enbrel is Amgen's largest drug, generating $5.23 billion, or 22%, of the company's $23.4 billion of revenue in 2019.
Launched in 1998, Enbrel is used to treat adults with moderate to severe active rheumatoid arthritis.
Amgen's patents cover etanercept, an active ingredient in Enbrel, and a process to make that protein. Enbrel was developed by Immunex Corp, which Amgen acquired in 2002.
Sandoz had won U.S. regulatory approval in 2016 for a "biosimilar" version of Enbrel, known as Erelzi, but has been unable to sell it in the United States.
The Novartis unit argued that Amgen's patents described concepts contained in previous patents and should therefore be invalidated because they were "obvious."
But the appeals court said Sandoz's argument amounted to "merely disagreements with the district court's weighing of the evidence."
U.S. District Judge Claire Cecchi in Newark, New Jersey, had upheld the patents' validity.
Michael Yee, a Jefferies analyst who rates Amgen "buy," said Wednesday's decision removed a "key overhang" for Amgen, likely freeing it from imminent competition for Enbrel.
Amgen is based in Thousand Oaks, California, while Novartis has offices in East Hanover, New Jersey.
The Federal Circuit handles intellectual property appeals.
The case is Immunex Corp et al v Sandoz Inc et al, U.S. Federal Circuit Court of Appeals, No. 20-1037.
(Reporting by Jonathan Stempel in New York; Additional reporting by Lewis Krauskopf in New York and Jan Wolfe in Washington, D.C.; Editing by Bill Berkrot and Dan Grebler)