In recent months, various significant legal decisions have emerged concerning AstraZeneca's (AZ) drug dapagliflozin. These decisions, from both the Court of Appeal and the Patents Court, have pivotal implications for the pharmaceutical industry, particularly when assessing launch strategies for generic drugs.
Among other important statements, the Court of Appeal's decision emphasises that the Court will place weight on preserving the status quo when deliberating whether to issue an injunction to stop generics launch. In these types of cases, damages may not in fact be adequate for both sides, as there may be very limited information available in relation to the calculation of damages, and the circumstances relating to the commercial market and launch readiness of other players can rapidly change, even during the course of the proceedings. All these factors are taken into account when deciding which course will cause the least irremediable prejudice to one party.
On validity, the High Court reaffirmed the UK standard for plausibility and followed guidance in earlier cases concerning pregabalin and apixaban, applying a stricter threshold than the EPO.
This article provides a comprehensive overview of the legal developments in the dapagliflozin case, highlighting the key legal principles and implications for the pharmaceutical industry.
Background
Dapagliflozin, developed by AZ, is a groundbreaking drug that inhibits the sodium-dependent glucose co-transporter protein (SGLT2), crucial for glucose re-uptake from the kidneys into the bloodstream. By inhibiting SGLT2, dapagliflozin effectively reduces blood glucose levels, making it a valuable treatment for type II diabetes. Notably, dapagliflozin was the first SGLT2 inhibitor approved for medical use.
AZ holds two marketing authorisations (MAs) for dapagliflozin: one for monotherapy and another for combination therapy with metformin. The basic patent (EP1506211) (the Patent) covers the compound and its use in the manufacture of medicine for the treatment of, inter alia, diabetes. The basic patent expired in May 2013 but two Supplementary Protection Certificates (the SPCs) remained in force: SPC/GB13/021, based on the monotherapy MA and SPC/GB14/050, based on the combination MA, both expiring in May 2028.
The legal proceedings
Between October and December 2023, three generic manufacturers (Generics (UK), Teva, and Glenmark), filed revocation actions before the High Court. Despite attempts to expedite the trial, it was scheduled for March 2025. On 20 February 2025, Glenmark notified AZ of its intention to launch dapagliflozin at risk, as early as 17 March 2025 (i.e. during the validity trial itself and before validity was determined). This led to a flurry of legal activity, with AZ seeking a preliminary injunction to prevent Glenmark's market entry, on 6 March 2025, a few days before the validity trial. AZ's application was made on a confidential basis and was set to be heard on 27 March 2025. The preliminary injunction sought was for the period of up to the form of order (FOO) hearing and was estimated by the parties to be one to three months from the earliest possible generic launch of 17 March 2025. The High Court initially refused the injunction, but the Court of Appeal reversed this decision, granting the injunction pending the validity trial.
High Court - preliminary injunction refused
Both the High Court, and later the Court of Appeal applied the well-known four stages test of American Cyanamid:
- Is there a serious question to be tried (or does the claimant have a real prospect of success?)
- Would damages be an adequate remedy for the claimant for the loss sustained pending trial (and is the defendant in a financial position to pay those damages)? If so, no injunction should normally be granted.
- If not, would damages on the claimant's cross-undertaking be an adequate remedy for the defendant? If so, then an injunction should normally be granted.
- Where there is doubt as to whether damages would be an adequate remedy for either side or both: where does the balance of convenience lie? This depends on all the circumstances of the case and where other factors appear to be evenly balanced - preserve the status quo.
Applying this test, the High Court refused the preliminary injunction. In particular, damages would be an adequate remedy for AZ, whether Glenmark were the sole generics on the market, or there were multiple generics. In both scenarios, the damages would be AZ's known profit margins multiplied by the number of packs sold (by Glenmark alone or by all generics on the market). Looking at the short period until the FOO hearing, it was unlikely that AZ would reduce price or increase discounts, or that dapagliflozin would be re-categorized, and therefore, price spiral was also unlikely. However, damages on the cross-undertaking would not be an adequate remedy for Glenmark nor for the NHS as quantification of Glenmark's damages on cross-undertaking would be significantly more difficult to calculate (unknown counterfactual and lose of first-mover advantage). Were it to be relevant, the risk of injustice also lay against granting the injunction.
Court of Appeal - preliminary injunction granted
The Court of Appeal decided, however, to grant the preliminary injunction up to the FOO hearing. In particular, evidence that was not before the lower court made a difference – this related to the position of Teva and another generic ('Generic X') which meant that, as argued by AZ, Glenmark no longer benefited from a first mover advantage. As a result, the Court of Appeal had more information about the counterfactual if an injunction were granted (as it was apparent that three generics were ready to launch with similar volumes). The Court also considered that it was uncertain how long the period to the FOO hearing would be - the longer it would be, the greater the pressure on AZ to reduce its price. The Court also considered that the potential damage to AZ arising after the FOO hearing should be considered together with the potential damage to AZ in the period before the FOO hearing; combined, there was real doubt as to the adequacy of damages as a remedy for AZ. Therefore, in these circumstances, there was a real doubt as to the adequacy of damages for both parties (and for the NHS), and so the Court decided it was prudent to preserve the status quo until the conclusion of the FOO hearing.
The Court also noted that the judge was wrong to: (1) discount Glenmark's failure to clear the way and (2) discount its plans to launch at risk in the middle of trial, when considering whether to preserve the status quo.
The CoA emphasized that there are a number of special factors in a generics launch at risk scenario:
- the entry of one generic company into a market which has been monopolised by the patentee is often (but not always) followed by the entry of one or more additional generic companies into that market. This can lead to price-cutting by all the suppliers to build or maintain market share, and a resultant downward price spiral.
- the process of categorizing and reimbursement with the NHS can make it difficult for the patentee to restore its previous price if successful at trial.
- on the generics side – they will have no track record of selling the product in question to enable lost sales to be quantified.
- a court can take into account, when considering the balance of the risk of injustice and deciding to preserve the status quo, that the generic company could have "cleared the way" for launch by bringing revocation proceedings sufficiently far in advance - a generic company intending to launch a product at risk must first obtain an MA and have a source of supply for a product which has obtained all necessary regulatory approvals. This must be planned some time in advance, so it could also take the necessary steps to clear the way in good time. Furthermore, the generic company will usually be well aware of the risk of infringement and will only launch at risk if it thinks there are good chances of success.
A generic's ability to "clear the way" in advance was emphasised and the Court made several comments indicating a somewhat negative view on launch at risk strategies, in this case, during sensitive timing in the middle of the validity trial. Lastly, it seems that the new evidence had a significant role in the Court's decision. Evidence of other generics' actual readiness for launch is crucial- the mere existence of other approved generic MAs is not sufficient to show they are likely to launch.
Validity
The claimants' case on validity focused on the following arguments: (1) the Patent did not make it plausible that dapagliflozin is an SGLT2 inhibitor, a selective SGLT2 inhibitor or useful for treatment of diabetes; and (2) the Patent did not make a technical contribution over the prior art, but only made an arbitrary selection of dapagliflozin from the class of compounds disclosed in the prior art without disclosing any advantage for dapagliflozin compared to that class.
In its decision of 28 April 2025, the Patents Court decided that the Patent is invalid and so also were the SPCs. The Court followed the guidance in the earlier pregabalin and apixaban cases and applied a stricter threshold than the EPO in relation to plausibility. The court emphasised that patents are granted for technical contributions to the art and that the claimed monopoly must be justified by such a technical contribution. This is a foundational requirement for both inventive step and sufficiency and the disclosure is assessed at the effective date. The Court concluded that the Patent did not disclose enough to make it plausible that dapagliflozin would have an in vivo effect on blood / plasma glucose, such that it could be used as an experimental tool, or would treat diabetes. Although the patentee is not limited to the most ambitious teaching in the specification (and a more modest assertion is possible), the plausible effect must be evident from the application itself, not inferred from post-filed evidence. The Court also noted that the disclosure does not have to be in the form of experiments / clinical trials but must disclose "reasonable scientific grounds" rendering the claimed technical effect plausible.
In addition, the Court stated that the claimed invention must not be an arbitrary selection, but needs to be justified by an unknown technical effect which is caused by the structural features and distinguishes the claimed compounds from other compounds. AZ was found to have merely selected dapagliflozin from a disclosed class of compounds without demonstrating a related advantage. This deficiency could not be remedied with post-filed data, despite the later commercial success of the product.
The decision confirms that the UK's strict approach to plausibility remains bound to the pregabalin and apixaban case law, and must be taken into consideration when drafting an application. This approach of the UK courts represents divergence from the EPO Board of Appeal's approach which applies a lower standard, requiring consideration of whether the skilled person would have "legitimate reason to doubt that the purported technical effect can be achieved with the claimed subject-matter".
In the meantime, the Court has granted AZ an interim injunction pending appeal of the validity decision, which is listed before the Court of Appeal on 25 June 2025, with decision expected to be handed down within a few weeks later at most.