After more than a decade of litigation, where Proneuron accused Teva of endangering the lives of patients and Teva accused Proneuron’s founder of distorting the clinical trial results, the District Court’s ruling was ratified: Teva conducted a clinical trial that was not properly planned and it must return the rights to Copaxone for non-Multiple Sclerosis indications

16.01.2020 | Gili Weinreb

Yesterday (Wednesday) the Supreme Court, headed by Justices Noam Solberg and David Mintz dismissed Teva’s appeal and Proneuron’s counter-appeal in a case between both parties regarding the rights for the Copaxone molecule for non-Multiple Sclerosis diseases.  This may be the final chord in this tumultuous trial between the companies that has lasted over a decade and was characterized by heavy mutual mudslinging.

The trial began in 2006, when Proneuron claimed that in order to avoid nullification of the agreement and returning the rights to the molecule to Proneuron, Teva entered a clinical trial doomed for failure with patients suffering from the muscular degenerative disease ALS, and in so doing, knowingly endangered the lives of the patients.  Teva backs the claim that the clinical trials were appropriate, and that actually, Proneuron’s founder, Prof. Michal Schwartz distorted clinical trials that indicated the opposite.

Yesterday, the Supreme Court upheld the ruling of Judge Avi Zamir of the Tel Aviv District Court.  Zamir ruled that Teva did indeed enter into a clinical trial that was not properly planned; and consequently, it did not meet the terms of the agreement.  Now it must return the rights to the product to Proneuron.  However, he ruled that it had not been proven that Teva had endangered patients or knew for certain that the trail was unnecessary.  The ruling issued by Supreme Court Justice Mintz accepted his position.

The implication is that Proneuron can develop the molecule for non-Multiple Sclerosis disease; however, it is not clear whether it is cost effective for it to do so, because the basic patent for Copaxone has already elapsed; and Proneuron is no longer functioning as a company.  It is possible that during the litigation, the option of developing the product for other diseases was lost.  However, if a way is found to extend the patent, for example by choosing a new method of administration, the game will be reopened for Proneuron.

Teva was represented by attorneys, Amir Levitzki, Yitzchak Marciano and a colleague from the Tulchinsky. Stern, Marciano, Cohen Levitzki & Co.  Proneuron was represented by attorneys, Gabriel Moyal Maor, Menachem Abramovich, Yaron Sobol and Eleanor Stark of the Hamburger, Evron & Co law firm.

Two Parties Holding Copaxone

Why did this case shake up the country?  Lets go back for a moment to a summary of the previous events:  When Teva purchased the rights to Copaxone for the treatment of Multiple Sclerosis from the Weizmann Institute – a drug that became its flagship product and generated revenues for Teva of billions of dollars per year, and most of its profit in the past decade, it did not buy all of the rights to this molecule for use with every disease, only with Multiple Sclerosis.

Prof. Michal Schwartz of the Weizmann Institute, who was not one of the original developers of Copaxone, conducted clinical trials of the molecule and discovered that, with slight changes, it could be used to treat other diseases.  Proneuron was established to commercialize this product and another one of Schwartz’s products.

When Teva found out that the molecule that is responsible for such a large share of its profits may be sold  on the market for other indications, and may even reach Multiple Sclerosis patients in a manner that threatens the product’s business model, it was basically left with no choice then to purchase the rights to the product from Proneuron.  This also had the potential of increasing its most profitable and strongest brand.  The agreement between the parties was signed in 2001.

The basis of the dispute is a paragraph in the agreement that demands of Teva to conduct a properly planned clinical trial, in a limited period of time, for one of the diseases that were designated in the contract.  If not – it would be obliged to return the product to Proneuron.  Such paragraphs generally are included in shared development agreements, in order to ensure that the company is acquiring the product in order to bring it to market and not to ‘bury’ it.

Teva chose to conduct a clinical trial on muscular degeneration of the ALS type.  Proneuron claimed that this was not the right clinical trial even before the trial was completed.   It claimed that Teva entered this clinical trial knowing that the changes of its success were slim, and did so only to meet the terms of the agreement to conduct some sort of trial in order for the product to remain in its possession.

Proneuron was required to prove that Teva did not conduct a clinical trial that was properly planned.  Proneuron made this claim and even went beyond.  As mentioned above, Proneuron claimed that Teva ignored evidence that indicated that the trial was unnecessary and may even be dangerous.  Teva counter=claimed that it entered the trial in good faith and with the goal of succeeding.

In the protocols of Teva meetings that were presented during the trial, Teva’s senior officials were documented as saying that it was possible to enter into a ‘cheap and short clinical trial’ in order to meet the demands of the agreement with Proneuron.  In a presentation prepared by Teva, parties at the company said that this was a clinical trial that enabled ‘gaining more time’, and it was the ‘easiest and least dangerous option,’  although in that same presentation a statement was made that ‘the chances of success of the product were very poor.’

The suit was filed in 2006, while the clinical trial was being conducted, and during the trial, the results were received:  the ALS clinical trial did indeed fail; however, its results did not indicate any harm to the safety of the patients or the shortening of their lives.

As previously mentioned, the Tel Aviv court ruled in 2015 that the clinical trial was not properly planned.  However, the judge did not consider this to be a conspiracy by Teva.  “Did Teva decide to conduct a baseless clinical trial, deliberately deceiving hundreds of patients, several regulatory committees, dozens of renowned researchers and physicians….. All of this without fear of the conspiracy being revealed?”  As expected from the wording of this statement, no such conspiracy took place.

Judge Zamir ruled that there was fundamental scientific justification to conduct a trial of the product on ALS; however, at the time when the trial was conducted (in 2006, right before the contract between the parties was scheduled to elapse if a trial was not conducted) the conditions to embark on such a trial were not yet ready.

In Zamir’s opinion, in light of the warning signs regarding the safety and the scarcity of information existing regarding the effectiveness, the Company should have conducted the research on animals, before launching a clinical trial on humans.  Zamir was under the impression that the trial was indeed conducted at a problematic time, inter alia, in order to buy time from Proneuron.

During the examination of the witnesses, Proneuron demonstrated that the team that consulted to Teva regarding the trial had determined in advance that its chances of success were ‘very poor’.  Consequently, in his testimony, Dr. Aharon Schwartz, who was then the director of Teva’s innovative projects, answered “so what”.  His intention probably was that it seemed to him possible to conduct trials whose chances of success were poor, if the benefit was likely to be great, such as finding a drug for ALS.  However, the judge called this answer “perplexing”.

Another claim raised by Proneuron during the trial was that it is preferable, even with Multiple Sclerosis, to administer Copaxone less frequently than daily doses.  Copaxone has been sold for most of the years of its patent in doses of 20 mg. for daily administration.  Right before the expiration of the patent for the 20 mg., Teva put Copaxone 40 mg. on the market, which is administered  just a few times a week.  Proneuron claimed that even the company’s original product, Copaxone 20 mg., could be administered in a lower quantity and frequency.  If this is indeed true, then the patients received a double dose of painful injections, with no need.  

During the trial, Proneuron presented evidence which in its opinion indicated that Teva wanted to avoid, at all cost, raising the question of whether the same results with Multiple Sclerosis could be received with half the quantity of Copaxone.  Therefore, it avoided entering into clinical trials that could have been more successful than the ALS trial, but with a reduced regimen.  Teva’s work plan indicates that “because Copaxone is marked for Multiple Sclerosis as a daily injection, of course the same product cannot be used with glaucoma at a significantly lower frequency without creating  commercial problems.”

In a meeting held at Teva in order to discuss the said glaucoma clinical trial, according to documents presented by Proneuron that ‘presentation of the two different treatment regimens for Multiple Sclerosis and degenerative nerve diseases may hurt Copaxone’s market share, because neurologist may consider a less frequent regimen with Multiple Sclerosis as well.”  During the trial, Dr. Schwartz answered that ‘this is a legitimate question, and there is indeed an element of risk; however, it did not impact our decision.”

The Court ruled that there apparently was no ‘conspiracy’ by Teva to conduct an ALS trial doomed for failure, just to prevent this secret from coming out.  The Court ruled on the issue of whether Teva had thought that it was possible to administer Copaxone 20 mg. in lower frequency and avoided doing so for business reasons.  It ruled that a decision on this on this issue was not essential to this entire case.

The Supreme Court Ratifies

In its appeal, Teva claimed, inter alia, that a clinical trial whose chances of success are poor or even very poor, can still be a ‘properly planned clinical trial.’ “The ruling of the District Court that a clinical trial should not be conducted as long as there is no clear clinical feasibility or convincing pre-clinical results is based on erroneous conclusions and it has far-reaching implications for scientific and medical research that focuses on muscular degeneration,” it claimed.  “A clinical trial is a trial whose risk justifies its being conducted given the potential benefit that may be expected from it.  When discussing such difficult and severe diseases, the benefit that would be developed for patients if it turned out that the drug was beneficial, would be so immense and great that it was right to conduct the trial even if there were any warning sign (and there was no data that indicated this).” 

This approach, which may sound strange to the average reader, is currently guiding the practice of treating ALS, where many clinical trials are approved based on little information, for the smallest chance of finding any way to ease this difficult and uncurable disease.

Justice Mintz agreed with Teva that not in every case in which the clinical trial was not supported by a good result in the live model means that the trial should not  be conducted.  However, he claimed that in this case, not only was there no evidence to support the trial, but there were real warning signs.  Nevertheless, the Supreme Court emphasized that it cannot be asserted according to this ruling that Teva did indeed endanger human lives.  According to the judge, no evidence was found that human lives were indeed endangered.

Finally, the Justice decided not to overturn the District Court ruling.