ZymoGenetics, King Pharma Brawl Over Drugs to Control Surgical Bleeding

11/9/09Follow @xconomy

ZymoGenetics started really playing hardball with King Pharmaceuticals in August, and now a high-and-tight fastball has come right back at the Seattle biotech company.

The projectile in question is a lawsuit filed on November 2 by Bristol, TN-based King in the U.S. District Court in Eastern Tennessee; the suit accuses ZymoGenetics of false advertising, unfair competition, and other violations of federal and Tennessee law. King went so far to ask a federal judge to impose three temporary restraining orders to stop ZymoGenetics (NASDAQ: ZGEN) from making certain claims comparing the two drugs—and it was successful for a couple of days until Zymo got the restrictions overturned on Friday.

The suit, it seems, is at least partly a response to a move made in the summer by ZymoGenetics, maker of a drug for surgical bleeding, to try to get King’s rival product pulled from the market. For those not following all of the two companies’ maneuvering, here’s a quick summary.

The incumbent product, Thrombin-JMI, is made by Bristol, TN-based King Pharmaceuticals (NYSE: KG) for surgeons to dab or spray onto an organ that’s bleeding too much during surgery. The King product has been around in hospitals since 1995, and generated $255 million in sales a year ago. Surgical bleeding drugs (called topical hemostats in the operating room) are used in an estimated 1 million surgeries a year in the U.S.

But ZymoGenetics, whose own drug was approved in January 2008, has been arguing for years that it can do a lot better. The King drug is derived from clotting proteins called thrombins in cow blood. Since that’s from a foreign source, the human immune system recognizes it as such, and can spark a reaction that can lead to severe bleeding and death, ZymoGenetics has argued.

The challenger in this niche market, ZymoGenetics developed what it considers a safer alternative, recombinant thrombin, a genetically engineered copy of the human thrombin protein. Because the new drug is a human, rather than cow, protein, it shouldn’t provoke as many immune reactions or dangerous bleeding episodes, ZymoGenetics has contended. But ZymoGenetics has struggled to convince doctors that they need to switch, and it has backed away from earlier attempts to charge premium prices. The company forecasts that it will generate $28 million to $30 million in sales of the drug this year.

Back in August, ZymoGenetics found another venue besides the marketplace in which to wage this fight—the FDA. The company gathered evidence of two cases in which physicians attributed patient deaths to bad reactions on its competitor’s drug, and 23 more cases of severe complications. That was some of the ammunition contained in a 31-page citizen’s petition the company filed with the FDA, in which ZymoGenetics asked the agency to pull the drug off the market for the sake of public health. “There are physicians using Thrombin-JMI without a clear understanding of its risks,” said ZymoGenetics CEO Doug Williams in an interview with Xconomy in August. “There are at least three better alternatives in the marketplace now.”

King, a company with a $2.7 billion market capitalization, didn’t comment at the time. But it obviously decided that when ZymoGenetics started playing hardball, it was time to follow suit.

King challenged the ZymoGenetics citizen petition with the FDA. (The agency is expected to provide an answer to the petition by February, says ZymoGenetics spokeswoman Susan Specht.)

But King didn’t stop there, it brought its side of the case to its local U.S. District Court, in front of Judge Ronnie J. Greer. King’s suit names not only ZymoGenetics as a defendant, but also “John and Jane Does 1-50″ who are paid presenters for the company, medical opinion leaders, sales reps, and medical science liaisons who King says it can’t identify unless the judge allows it to go ahead with legal discovery—essentially digging through all kinds of internal ZymoGenetics files.

In its 83-page legal complaint, King says that ZymoGenetics used false and misleading statements about the two companies’ products despite a warning from the FDA in April 2008. King says there’s no evidence from ZymoGenetics’ own clinical trials that links formation of antibodies to cow proteins in Thrombin-JMI with any serious adverse events in surgery patients. “Notwithstanding the lack of evidence and the reprimand from the FDA, [ZymoGenetics] and its agents and representatives continue to make the aforementioned claims in a willful and malicious attempt to scare away King’s existing and potential customers of King’s thrombin product, knowing that without such tactics, consumers prefer King’s well-established and clinically tested Thrombin-JMI product.”

King goes on to argue in its suit that it has found out that ZymoGenetics and its representatives have started telling customers that “King’s thrombin product causes death” and that they should quit using it immediately or else risk medical malpractice lawsuits. “Having exhausted all other means to quell [ZymoGenetics'] wrongful actions, King is left with no other option than to seek relief from the court,” King said in its filing.

There are a flurry of documents being filed daily in the case, but ZymoGenetics’ Specht summed up the company’s defense. “We believe the allegations from King are baseless,” Specht says.

Analyst David Miller of Biotech Stock Research, who follows ZymoGenetics, says the case bears watching, but that Zymo should win. “The FDA is the arbiter of proper marketing materials for approved drugs, which includes a review of materials for accurate claims. As long as Zymo is using approved materials, and they are, this suit goes nowhere,” Miller wrote in a note to clients on November 5.

This case is headed toward a November 16 initial court date.

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  • JK

    I am an unbiased observer to this case but as a person familiar with FDA activities I must say that this is a very poorly researched article. While the article is correct when it quotes Mr. Miller as saying that “The FDA is the arbiter of proper marketing materials for approved drugs,” the article (and Mr. Miller) fail to mention that in April of 2008 the FDA’s division that reviews marketing materials actually sent an untitled letter to Zymogenetics claiming that some of its promotional materials were misleading and therefore in violation of FDA rules on product promotion (http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/ComplianceActivities/Enforcement/UntitledLetters/ucm093490.htm). These materials specifically related to Zymogenetic’s claims vis-a-vis King’s product and were mentioned in King’s lawsuit. While it is unclear if Zymogenetics is still making similar claims and unclear whether they patched things up successfully with the FDA, the letter is clearly relevent to the case. The letter also calls into question the second half of Mr. Miller’s quote “As long as Zymo is using approved materials, and they are, this suit goes nowhere.” I agree that if Zymogenetics is using appropriate materials they are safe, but the FDA reviews (rather than approves) individual advertising peices and it is not clear that the FDA agrees with Zymogenetics’ marketing activities.

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    JK—this story does include a reference to the FDA’s warning to ZymoGenetics about its marketing practices in April 2008, but that’s nothing new. The more interesting question is whether ZymoGenetics has crossed the line in its marketing again in the view of the FDA, and I don’t know the answer to that. Certainly, the company stepped up its attacks on King with the citizen petition in August, and it will be interesting to see how the FDA views this new tougher communication to doctors. If you have any evidence of them, or King, or anyone else making claims to physicians that are flat wrong or misleading, I’d like to look into that as a follow up. –Luke

  • Sarah Lake

    Interesting, just 2 deaths in 14 years (or 14 million cases, according your acticle) -not much evidence…