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U.S. Federal Court Finds In Favor Of Allergan, Inc. And Issues Permanent Injunction Against Merz Pharmaceuticals And Merz Aesthetics

Stocks in this article: AGN

Allergan, Inc. (NYSE:AGN) confirms that U.S. District Judge Andrew J. Guilford, after conducting a full trial, ruled that Merz Pharmaceuticals and Merz Aesthetics violated California’s Uniform Trade Secrets Act and issued a permanent injunction against them. In a written decision, Judge Guilford concluded that Merz misappropriated important trade secrets belonging to Allergan, including “the specific identities and financial details (including sales targets, actual sales amounts, and product volumes over time) of Allergan’s relationships with virtually all of its physician customers in the United States for BOTOX ® Cosmetic (onabotulinumtoxinA) and JUVÉDERM ® and a large segment of Allergan’s physician customers in the United States for BOTOX ® (for therapeutic indications).” The court also found that Merz misappropriated “Allergan's strategic marketing plans, including its plans to address competition from Merz Aesthetics and Merz Therapeutics. The value of this information is incalculable.”

The court concluded that the injunction, which prohibits Merz from, among other things, selling or soliciting purchases of their product, Xeomin ® , in the facial aesthetics market for 10 months, was necessary to serve the public interest. As the court noted, "the right of free competition does not include the right to use the confidential work product of others."

In addition to the U.S. ruling, Allergan prevailed last week in two separate cases that were filed against Merz in Europe. In Germany, the Hamburg Regional Court ruled that Merz is prohibited from claiming a 1:1 dose equivalent ratio between units of Allergan’s BOTOX ® (onabotulinumtoxinA) and Merz’s Xeomin ® , which is in line with a prior decision of that Court in December 2011. In Spain, Merz was found to be in breach of the Spanish Pharmaceutical Code for referring to a conversion ratio without, at the same time, making an express warning about the fact that the unit doses are not interchangeable. The full text of the Spanish ruling can be found at http://www.autocontrol.es/pdfs/pdfs_recursos/rect1069.pdf.

The findings in Germany and Spain are consistent with the U.S. Food and Drug Administration’s (FDA) substantial efforts to emphasize the non-interchangeability of BOTOX ® and other botulinum toxin type A products. In order to protect the public health, the FDA established a class-wide requirement that the labeling for all botulinum toxin type A products state that potency units of the different products are not interchangeable and that they cannot be compared or converted in dosing.

“We believe that full and fair competition is healthy,” said David E.I. Pyott, Allergan’s Chairman of the Board, President and Chief Executive Officer. “It is important to ensure that physicians and consumers receive accurate and truthful information and are able to make informed decisions about the products they choose to use. As the leader and innovator in the medical aesthetics category, we remain committed to supporting and growing this market on behalf of physicians and the customers they serve.”

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