Lilly Uses `Horny Goat Weed' to Fend Off Cialis Royalty Demands

(Bloomberg) -- Eli Lilly & Co. told a federal jury that a German company is trying to take credit for centuries-old Chinese medicine in seeking royalties on the use of its erectile-dysfunction drug Cialis to treat an enlarged prostate.

Erfindergemeinschaft UroPep GbR, a company founded by researchers from Hannover Medical School, claims it’s entitled to royalties from Lilly’s sale of Cialis based on a patent for prostate treatment. UroPep is seeking $84.3 million, or 12 percent of the $704 million in Cialis sales since 2011 that relate to its use in treating benign prostatic hyperplasia, also known as BPH.

“We offered to give Eli Lilly permission” to use the patented invention, UroPep lawyer John Hughes of Bartlit Beck in Denver told a federal jury in Marshall, Texas. “Their response: silence.”

Lilly said the patent didn’t cover anything new -- and pointed to Chinese home remedies including one known as Horny Goat Weed, which it said is used both for erectile dysfunction and to treat BPH. It’s not the first time Lilly has brought up the herb -- it was used to successfully invalidate part of a Pfizer Inc. patent for the rival impotence drug Viagra.

“UroPep filed a patent with nothing more than an idea,” Lilly lawyer Todd Vare of Barnes & Thornburg in Indianapolis told the jury. The idea “is well-known and obvious throughout the world.”

The drug, more commonly prescribed for erectile dysfunction, generated almost $2.5 billion last year, more than 11 percent of the Indianapolis-based company’s revenue. It’s Lilly’s second-biggest seller, behind the insulin Humalog, used to treat diabetes. Hughes told the jury that UroPep was not seeking royalties on any sales of Cialis for impotence.

The UroPep patent, issued in the U.S. in 2014, is for the use of a class of compounds to treat certain prostate diseases, including BPH. Lilly contends the patent doesn’t cover the specific active ingredient in Cialis, called tadalafil.

Cialis was approved by U.S. regulators to treat erectile dysfunction in 2008 and in December 2010 Lilly asked the U.S. Food and Drug Administration to also approve Cialis for treatment of the signs and symptoms of BPH.

After Lilly got approval, one of the UroPep inventors emailed Lilly to inform it of the then-pending patent application. Lilly didn’t respond to requests for licensing talks, UroPep contends.

This isn’t the only case in which Lilly is trying to fend off royalty demands from Cialis. The drugmaker is working to invalidate a patent owned by Los Angeles Biomedical Research Institute for a method of arresting penile fibrosis.

Presiding over the trial is Circuit Judge William Bryson, who occasionally handles district court cases but normally sits on the U.S. Court of Appeals for the Federal Circuit in Washington, which handles all patent appeals. While neither Lilly nor UroPep are based in Texas, the case was filed there because the court is the most popular for patent litigation.

The jury is expected to begin deliberations by Friday.

The case is Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co., 15cv1202, U.S, District Court for the Eastern District of Texas (Marshall).

To contact the reporters on this story: Dennis Robertson in Marshall, Texas at drobertson28@bloomberg.net, Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman