SANOFI-AVENTIS DEUTSCHLAND GMBH & ANOR V AFT PHARMACEUTICALS LIMITED HC AK CIV 2009-404-1795

SANOFI-AVENTIS DEUTSCHLAND GMBH & ANOR V AFT PHARMACEUTICALS LIMITED HC AK CIV 2009-404-1795 3 August 2009IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2009-404-1795UNDER the Patents Act 1953 AND UNDER the Copyright Act 1994 IN THE MATTER OF Infringement of New Zealand Letters Patent number 331933 Copyright Infringement BETWEEN SANOFI-AVENTIS DEUTSCHLAND GMBH & ANOR Plaintiffs AND AFT PHARMACEUTICALS LIMITED Defendant Hearing: 23 July 2009 Counsel: G F Arthur & K McHaffie for Plaintiffs C L Elliott for Defendant Judgment: 3 August 2009JUDGMENT OF KEANE JThis judgment was delivered by Justice Keane on 3 August 2009 at 4pm pursuant to Rule 11.5 of the High Court Rules.Registrar/ Deputy Registrar Date:Solicitors: A J Park Law, Wellington for Plaintiffs A J Pietras & Co., Wellington for Defendant[1] Sanofi-Aventis, a German pharmaceutical company, owns the New Zealand patent 331933, dated 7 March 1997, protecting a compound of leflunomide and teriflunomide, the metabolite of leflunomide, used principally for the treatment of rheumatoid arthritis, and sold under the brand name ARAVA. Sanofi-Aventis NZ is the New Zealand distributor under licence. [2] Sanofi's New Zealand 1978 patent for leflunomide itself expired in 1999 and since July 2007 AFT Pharmaceuticals, a New Zealand pharmaceutical company, has imported from Canada and marketed with Ministerial consent a generic leflunomide product branded AFT-leflunomide. [3] This product, Sanofi claims, infringes its patent for the leflunomide – teriflunomide compound. It contains not just leflunomide, but predictably if not typically, teriflunomide in excess of 0.3% of leflunomide by weight. That brings it within the scope of the 1997 patent. Sanofi seeks injunctive relief and an inquiry into and the payment of damages and profits. More immediately, it seeks interim relief restraining AFT from manufacturing, importing, or marketing AFT-leflunomide or any other leflunomide product. [4] AFT does not concede infringement. For the purpose of this application, however, it accepts, in the sense that it does not contest, that Sanofi has raised an arguable question as to whether AFT-leflunomide does infringe. AFT does not presently contest that AFT-leflunomide, when taken from the shelf, might contain in excess of 0.3% teriflunomide. But that is not, it says, as a result of manufacture. As the metabolite of leflunomide, teriflunomide can emerge fractionally during the shelf life of the tablet. That is all. [5] AFT challenges the validity of Sanofi's 1997 patent on four interrelated bases. In 1997, when the patent was obtained, AFT says, leflunomide and teriflunomide were well known, as was their interrelation, as was the therapeutic value of leflunomide. Sanofi's patent seeks to protect the obvious. Sanofi also seeks to protect an interrelation which is neither inventive nor useful, and rests on no unexpected synergy. Sanofi's claim that teriflunomide, even at 0.3% of leflunomide by weight, enhances the therapeutic value of the two has never been satisfactorilydemonstrated. The principal claim the patent makes, and seeks to protect, AFT says, lacks a fair basis. [6] AFT characterises the 1997 patent as an illegitimate attempt by Sanofi to hold on to the monopoly right to leflunomide it lost when its 1978 patent expired in 1999; a technique known internationally as 'evergreening'. AFT may go so far as to say that the patent claims protection for the lowest fraction of teriflunomide in the compound, 0.3%, not because that has any therapeutic value, but because leflunomide can during its shelf life can contain that percentage naturally, thus capturing any generic leflunomide product. [7] Sanofi defends the validity of its 1997 patent on every one of these contested bases and contends that to describe its purpose as 'evergreening' is both unfairly pejorative and inaccurate. AFT entered the market, as it accepts, Sanofi points out, knowing of the 1997 patent. AFT ought now to be enjoined from exploiting the market position it has garnered since, contrary to Sanofi's monopoly right, until the issues can be gone into substantively. Sanofi will suffer irreparable damage if it does not. [8] Shortly before the hearing AFT applied for an order requiring Sanofi to answer interrogatories to establish the proportion of teriflunomide in ARAVA. Sanofi contended that this would require an oppressive document search and the loss of its fixture. I held that the fixture had to proceed. The teriflunomide proportion in the compound does not need to be resolved definitively until trial. I am not to be taken to accept that the documentary search apparently called for would be oppressive. [9] Finally, Sanofi claims as well that AFT is in breach of Sanofi's copyright in the ARAVA datasheet. That is no longer pursued on this present application. AFT has modified its sheet sufficiently to make that uncalled for. This question may still be ventilated at trial.Context[10] Sanofi is the heir to Hoechst AG, the German pharmaceutical company that identified leflunomide in 1978 and teriflunomide in 1986. Clinical trials of leflunomide began in 1989. Worldwide regulatory consents were not given until 1998. Consent to market leflunomide, or the compound with teriflunomide, under the ARAVA brand, was given provisionally in New Zealand in March 2000 and fully in February 2009. [11] Sanofi says that the 20 year monopoly obtained for leflunomide under the 1978 patent that expired in 1999 was of little commercial worth. Sales in New Zealand were minimal until May 2002. Between April 2000 – April 2002 Sanofi supplied ARAVA nationally, through one pharmacy, without seeking payment, to patients prescribed ARAVA by their rheumatologists. [12] Pharmac agreed in April 2002 to fund ARAVA fully for five years. That was on condition that ARAVA was prescribed only by rheumatologists and only to patients with rheumatoid arthritis unable to tolerate or respond to two alternatives. Sanofi had also to repay Pharmac for sales over a ceiling, the effect of which was to reduce the list price for 10 mg packets from $176.70 to $101.00 and for 20 mg packets from $242.10 to $142.00. Over the five years Sanofi was obliged to refund Pharmac for above ceiling sales $8.1M. [13] In April 2007 Pharmac and Sanofi entered into a two year contract, this time without the expenditure cap. The limiting conditions were also removed on 1 November 2008. But ARAVA remained prescribed only by rheumatologists and only to those suffering moderate to severe rheumatoid arthritis, and the price reduced for 10 mg packets to $79.27 and for 20 mg tablets to $108.60. [14] In the final year of the five year contract, Sanofi says, it earned $1.75M. Despite volume sales increasing since by in excess of 10% each year, annual revenue presently stands at $1.6M. Partly this is the result of the reduced price and discounting. It is also the result, Sanofi contends, of AFT's generic, AFT-leflunomide, in the market. AFT accepts that its market share in the year to June 2008 was 16.4%. It was 11.7% in the succeeding year. [15] AFT entered the market, as it accepts, knowing of Sanofi's patents. It relied on the fact that Sanofi's 1978 leflunomide patent had expired in 1999. It did not consider itself caught by the 1997 patent for the leflunomide-teriflunomide compound. Its generic drug is leflunomide, not any compound. Its advice, furthermore, was that the current patent is an invalid attempt to extend the expired 1978 patent. [16] That AFT wished to enter the market with its generic product was made public on 6 July 2006. On that date Medsafe's provisional consent was notified in the New Zealand Gazette. On 9 October 2006 Medsafe sent the datasheet for AFT- leflunomide to all Medsafe email subscribers, including Sanofi. [17] On 26 April 2007 Pharmac entered into a contract with AFT conditional on the approval of the Pharmac board. Under this contract AFT was to receive for its generic product $76 for a packet of 20 mg tablets, as compared with the payment Sanofi received, $108.30. For a packet of 10 mg tablets AFT was to receive $55 compared with $79.27 for ARAVA. On 2 May 2007, in a letter to all interested parties, including Sanofi, Pharmac disclosed this provisional agreement. It said that during that month the Pharmac board would decide whether to confirm the agreement. It called for responses by 18 May. [18] In a letter dated 18 May Sanofi responded making two points. One was that AFT was not supplying, as part of its range, the 100 mg tablet needed for the initial loading dose. The other was that because leflunomide can cause foetal damage after treatment ceases, that needed to be monitored. Sanofi did that free of charge. Was AFT to do the same? Sanofi said nothing about any infringement of its patent. It does not dispute that it was aware of AFT-leflunomide's commercial launch in July 2007. [19] In June 2008 Sanofi sent samples of AFT-leflunomide 20 mg and 10 mg tablets to France for testing. The purpose was, Sanofi says, to establish whetherAFT-leflunomide was manufactured to a clinically acceptable standard. That analysis was made in November 2008, but by then the samples were past their use by date. In February 2009 a sample of 20 mg tablets was analysed just within use by date. Further samples of 20 and 10 mg tablets were analysed shortly after. [20] The three Sanofi analyses, the first and third as to both 20 mg and 10 mg tablets and the second as to 20 mg tablets only, show that AFT-leflunomide taken from the shelf can contain in excess of 0.3% teriflunomide. The two analyses of 10 mg tablets disclose teriflunomide in the range 0.5 - 1%. The three analyses of 20 mg tablets disclose its presence in the range 0.2 – 0.5%. [21] On 17 February 2009, 31 months after AFT-leflunomide obtained Medsafe's consent and it was publicly notified, A J Park & Co, on behalf of Sanofi, notified AFT of the existence of Sanofi's 1997 patent and two days later sent a cease and desist letter. Sanofi's commenced its proceedings slightly in excess of a month later on 27 March 2009. [22] Sanofi's and AFT's two year contracts with Pharmac expired at the end of April 2009. In December 2008, anticipating this, Pharmac invited tenders for the sole supply of leflunomide. Sanofi tendered at its present price. AFT elected not to tender. Pharmac has still to make any decision. [23] There are now two other generic suppliers seeking a place in the market. On 2 April 2009 Medsafe consented to Novartis marketing Leflunomide Sandoz in 20 mg and 10 mg tablets. Medsafe has still to decide an application by Apotex NZ Ltd made on 18 August 2006 as to Apo-leflunomide. Their potential part in this story remains unknown. [24] When this issue of interim relief was first in prospect earlier this year Pharmac reserved its position as to how best to meet its statutory purpose: to secure the best health outcomes achievable for pharmaceutical treatment within funding. Over the next four years Pharmac does hope, it made clear then or later, to maintain the saving achieved since AFT entered the market, $660,000 - $730,000 each year.[25] Since then Pharmac has set out to give Sanofi a measure of reassurance. In an affidavit dated 22 July 2009 Pharmac's chief executive gave an undertaking that it would not reference price ARAVA to AFT-leflunomide, or award sole supply to AFT, until these present proceedings are resolved either by judgment or settlement. He confirmed also that Pharmac has not agreed to subsidise Apotex's brand. [26] On 23 July A J Park & Co, on behalf of Sanofi, invited Pharmac to extend its undertaking, to confirm that it would not 'reduce the subsidy of ARAVA or delist ARAVA from the Pharmaceutical Schedule until the present litigation has been resolved or until a third party generic leflunomide is listed on the Pharmaceutical Schedule and has entered the New Zealand market.' Pharmac was invited to disclose whether it had entered into any agreement to subsidise any other brand of leflunomide. [27] By letter that day from Bell Gully, Pharmac's solicitors, Pharmac gave an undertaking to extend for 12 months, but capable of being extended as long as Sanofi undertook to meet Pharmac's lost savings after 12 months, if these proceedings were still in train. The undertaking was this:It will not use any of its mechanisms to adjust or remove the subsidy of ARAVA solely as a result of the presence of AFT-leflunomide on the Pharmaceutical Schedule until the present litigation has been resolved Pharmac confirmed that it had still to take a decision as to sole supply in the current tender round. Beyond that Pharmac was not prepared to go. Whether it had received any bids beyond that made by Sanofi, it said, was commercially sensitive and had to remain confidential. [28] At the hearing on 23 July 2009 Sanofi continued to advance the argument that Pharmac, despite its undertakings, might before judgment or settlement adjust or remove the ARAVA subsidy by reference pricing it to a therapeutic alternative to leflunomide, or bring about that result in some other way. Sanofi sought a still wider undertaking. In a letter dated 28 July Pharmac clarified its position.[29] First, as to reference pricing to AFT-leflunomide, or mechanisms to adjust or remove the subsidy for ARAVA solely as a result of the presence of AFT- leflunomide on the schedule, Bell Gully said on behalf of Pharmac:To avoid any doubt we confirm that the reference to any of the mechanisms available to Pharmac covers all mechanisms available to Pharmac to adjust or remove the subsidy for ARAVA, solely as a result of the presence of AFT-leflunomide on the Pharmaceutical Schedule, including, but not limited to, reference pricing, parity pricing and delisting.[30] Secondly, as to the new players on the market, Apotex and Novartis, Bell Gully said on behalf of Pharmac:For the avoidance of doubt, these brands are unrelated to these proceedings and thus, Pharmac's undertaking does not extend to mechanisms available to Pharmac to adjust or remove the subsidy for ARAVA in the event that one or other of those other brands is listed on the Pharmaceutical Schedule.[31] Thirdly, as to Sanofi's contention that the presence of AFT-leflunomide on the Pharmaceutical Schedule places a downward pressure on the price of leflunomide regardless of with whom Pharmac is dealing, Bell Gully said on behalf of Pharmac:Pharmac does not consider the possible impact of AFT-leflunomide's listing on the Pharmaceutical Schedule on the subsidy pricing offered by suppliers of other brands of leflunomide that are not currently listed, to be relevant to these proceedings.[32] In this letter Pharmac also imposes a condition on its undertakings, not imposed until then. All Pharmac's undertakings will be withdrawn immediately Sanofi is granted an interim injunction against AFT. [33] In a memorandum, dated 30 July 2009, Sanofi contends that Pharmac cannot impose this last condition retrospectively. Sanofi's own position remains unchanged. Pharmac's continuing ability to price leflunomide at the AFT-leflunomide level, it says, depends on AFT remaining in the market. If Pharmac treats with a new entrant at the AFT-leflunomide price Sanofi will be as irreparably harmed, it says, as if Pharmac were treating with AFT directly.Principles of relief[34] To succeed on this application for interim relief Sanofi must establish that there is a serious question to be tried, and that the balance of convenience lies in favour of granting of relief. Ultimately, the overall justice of the case must be considered: Klissers Farmhouse Bakeries Limited v Harvest Bakeries Limited [1985] 2 NZLR 140 (CA) 142. [35] As to whether there is a serious question to be tried, the issue is whether there is 'a tenable combination of resolutions of the issues of law and fact on which the plaintiffs could succeed': Henry Roach (Petroleum) Pty Ltd v Credit House (Vic) Pty Ltd [1976] VR 309, 311 Lush J. As to where the balance of convenience lies, that can also be described as the 'balance of the risk of doing an injustice': Cayne v Global Resources plc [1984] 1 All ER 225 (CA), 237, May LJ. [36] These twin principles were settled in a patents case, American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504, where Lord Diplock said at 508 – 510 'the grant of interlocutory injunctions in actions for infringement of patents is governed by the same principles as in other actions.' But while that is true, in a patents case there is this singularity. [37] In asserting that there is a serious question as to infringement, Sanofi is entitled to rely on the validity of its 1997 patent, which is to be deemed valid until AFT can establish it is invalid or raise a serious question. The initial onus lies on Sanofi, which seeks relief, not on AFT which opposes it. There will not be a serious question as to infringement if AFT can demonstrate invalidity. But if the most that AFT can do is to raise a serious question as to validity, infringement remains seriously arguable: Monsanto Co v Stauffer Chemical Co (No 1) (1984) 1 NZIPR 518, 528; Eli Lilly & Co v Douglas Pharmaceuticals Ltd [1984] 1 TCLR 119, 122;Smale v North Sails Ltd [1991] 3 NZLR 19, 38; Eveready New Zealand Ltd v Gillette New Zealand Ltd (HC AK, M 1130/98, 28 August 1998), Elias J. [38] Assuming a serious question as to infringement, or equipoise between that question and a no less serious question as to invalidity, the next issue will bewhether, in assessing the balance of convenience, an award of damages to Sanofi would compensate it for any loss it suffers before trial, assuming it succeeds at trial. If an award would compensate that is the end of the matter. As Lord Diplock said inAmerican Cyanamid at page 510:If damages in the measure recoverable at common law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage.[39] If an award of damages would not compensate Sanofi it must still make out its claim for interim relief. Also to be assessed is whether an award of damages would compensate AFT if interim relief were granted but AFT succeeds at trial. As Wild J identified in Ashmont Holdings Ltd v Bayer New Zealand Ltd (HC AK, CIV 2007-404-3518, 10 September 2007), where damages would compensate neither adequately, the status quo and the overall justice of the case assume decisive importance. [40] In this present case a helpful, even definitive, benchmark is to be found inNovartis New Zealand Ltd v Aktiebolaget Hassle [2004] 2 NZLR 721, CA, a case close to this where issues of infringement and validity were also delicately poised. There the Court of Appeal described the issues as they concerned damages, the balance of convenience generally, and the overall justice of the case, as requiring:a very difficult and complicated balancing exercise because of the uncertainties created by the unusual and controlled nature of the market under the influence of Pharmac and the existence of the tender process.[41] Pharmac's role is pivotal. It is the gatekeeper. By the funding choices it makes it decides for and against pharmaceutical suppliers. Only the drugs it funds can expect a secure place in the New Zealand market. The analysis called for inNovartis was as complex as it was because there the generic supplier was seeking to enter the market and there was no evidence about what market share it might hope to garner. There was equally no evidence as to what Pharmac would do before trial. Neither is a factor in this case. AFT is in the market and Pharmac has declared its hand.Fact of infringement[42] There can be no debate that Sanofi has raised a serious question to be tried as to the fact of infringement. AFT acknowledges that it entered the market aware of Sanofi's patent. It contends that AFT-leflunomide does not infringe and that will be the first issue for trial. But AFT does concede that there is at least as to infringement a serious question. [43] Apart from Sanofi's three French analyses, establishing the presence of in excess of 0.3% teriflunomide in three samples of AFT-leflunomide taken from the shelf, to which I referred at [19], AFT's own evidence is to the same effect. Pascal Proulx of the Canadian Corporation, Pharmascience Inc, Montreal, is clear that during shelf life a fraction of teriflunomide can be expected in leflunomide tablets as a result of hydrolysis. The experience of Pharmascience is that over six – 24 months leflunomide tablets can contain 0.42 % – 0.79 % teriflunomide. That can become 1.44 % over 36 months. [44] That this is so may mean that there can be no literal issue about infringement. But that leaves for trial the correlative issue as to validity. If it is a characteristic of leflunomide that a fraction of teriflunomide can be expected to emerge during usual shelf life, in what sense is a compound of leflunomide and teriflunomide not obvious, in what sense is it inventive or useful; in what sense does the 1997 patent have a fair basis?Validity issues[45] Perhaps the easiest issue with which to begin is whether the compound is or is not obvious, when set against what was known or in use in New Zealand before the priority date of the patent, March 1996, judged from the perspective of a skilled person having a common general knowledge of the field. [46] AFT claims that the compound and its declared use were both obvious, having regard to the then extant 1978 Sanofi patent for leflunomide and a 1995 technical article. Sanofi contends that there is no evidence as to what was thencommon general knowledge. The 1978 leflunomide patent does not disclose teriflunomide. Teriflunomide was not invented until 1986. The article does not refer to the compound. AFT's own witnesses, two rheumatologists, even now say they would not have expected the compound to have any greater therapeutic effect than leflunomide alone. [47] On this issue I find the evidence of Sanofi's witness, Associate Professor Fawcett, a pharmacologist, decisive. He has expressed his opinion over three phases beginning with an affidavit dated 6 July 2009, in which he sets out to answer, without having seen the patent, this question:If a person skilled in pharmacology were asked in March 1996 to make a leflunomide formulation, what factors would they consider and what pharmaceutical principles would they apply?[48] After a literature search that, I see, was confined largely to texts or papers published in 2007 – 2008, not seemingly anything in or before 1996, Associate Professor Fawcett identified the therapeutic, biopharmaceutical and drug factors likely to be in play or desirable without referring at all to teriflunomide. [49] In an affidavit dated 15 July 2009, having then seen the two documents on which AFT relies, the 1978 Sanofi leflunomide patent and the 1995 article, Associate Professor Fawcett considered whether leflunomide might be polymorphic, that is able to 'exist in more than one form or crystal structure'. He did not mention teriflunomide. [50] In his final affidavit dated 20 July 2009 Associate Professor Fawcett, after seeing for the first time the 1997 patent, said that it would not have been clear in 1996 to a person, appropriately skilled, that teriflunomide would become teriflunomide once ingested. He said also that it is unusual to combine a drug with its metabolite and that if leflunomide, combined with teriflunomide, is more therapeutically effective than leflunomide alone, there must be something pharmakinetically unusual about the combination. [51] Professor Fawcett's ultimate conclusion is that in 1996, particularly having regard to the 1978 patent for leflunomide and the 1995 article on which AFT relies,there would have been no reason for a person skilled in formulation science to combine leflunomide and a small amount of its metabolite. For this immediate purpose that is more than enough. But it begs the question as to the efficacy of the compound. [52] The next issue is whether the claims made in the patent are fairly based on the matter disclosed in the specification. Claim one, the widest claim Sanofi makes, claims protection for a compound in which the range of teriflunomide is extremely wide. It is 0.3 - 50% of leflunomide by weight. Sanofi has tested in the range 1 – 11%. How those results translate to 0.3% teriflunomide, or to 50% teriflunomide, is untested. [53] AFT contends, therefore, that the claim is far too wide and is not fairly based. The specification does not disclose or exemplify a combination with teriflunomide less than 1% or as great as 50% by weight of leflunomide. And as to this issue Sanofi receives at best measured support from its own witness, Professor Tucker, Professor of Pharmaceutical Sciences and Dean of the School of Pharmacy at the University of Otago. [54] Professor Tucker does not endorse Sanofi's study uncritically. He says also that predictive animal studies do not always translate to humans. Nor can he extrapolate to 0.3% teriflunomide, he says, the efficacy of data relating to 1% teriflunomide. The most that he can say is that 'it is not unreasonable to assume that 0.3% would have some effect'. [55] These last questions arise more widely, and more acutely, when the question becomes whether the compound is inventive, creating a synergy that makes it more therapeutic than leflunomide alone, or whether it is merely a collocation in which each has its usual independent effect. That throws into relief also the question of usefulness. [56] The evidence as to these matters is far from conclusive. Sanofi relies, of course, on the study. It was conducted by Dr Robert Bartlett, who discovered leflunomide as well as teriflunomide when employed by Hoechst AG, and his earlierstudy of leflunomide predicted its therapeutic value. However, he died in September 1998. His co-inventor, according to the patent, Dr Johann Then, who has given evidence on this application, has not been active in research since 1989. [57] Equally AFT has made no study of its own and has still to complete discovery. It is not equipped to mount any cogent challenge to the study on which Sanofi relies. The most that it can do is raise issues of apparent substance that can only be resolved definitively at trial. [58] The most that I am prepared to say for present purposes is that all the challenges that AFT makes to the validity of the patent, apart from that as to obviousness, seem to me to be seriously arguable and indeed to set the issue as to validity in equipoise with that as to infringement, given the way in which the infringement is said to have arisen.Balance of convenience[59] What the balance of convenience requires until trial (in the two senses whether damages would compensate the one or the other and what is the status quo ante bellum to be preserved) is to be resolved against the two features of this case that set it apart from Novartis. [60] The first distinguishing feature is this. AFT is not a new entrant to the market. It has been trading since July 2006 with the advantage of the Pharmaceutical Schedule listing. The market share that it has garnered has remained remarkably fixed, in the range 13 – 16%. Sanofi has retained the lion's share of the market because consumer choice does not depend simply on price. Leflunomide, and presumably the compound, is prescribed only by rheumatologists. It is a drug with considerable side effects of which, naturally, pharmacists also are aware. Patient preference may well play a part. All of this is unlikely to change before the hearing. [61] Two consequences flow. One is that Sanofi cannot claim that the status quo to be preserved was that obtaining when AFT entered the market. Sanofi tolerated that happening. It did not assert its monopoly right, as it is now seeking to do, forsomething like 32 months. In that time, with Medsafe's consent and Pharmac's support by subsidy, AFT established itself in the market. It obtained an appreciable share. Pharmac made significant savings annually. The status quo, as at the date of hearing, which I think more real, was and remains that AFT as well as Sanofi has a legitimate market interest to protect and Pharmac has a distinct public interest. [62] The second consequence is that, if AFT remains in the market but Sanofi obtains judgment, Sanofi will suffer no irreparable harm. The loss that it will suffer is readily quantifiable. It is the loss of AFT's established market share, which has remained remarkably constant. And the damages to which it would be entitled, as I read AFT's financial statements, lie within AFT's capacity to meet. [63] By contrast, and I need only mention this, I am less convinced that AFT could be compensated in damages if interim relief were granted, but AFT succeeded at trial. It is a small company. It has obtained its market share by offering to pharmacies nationally a suite of drugs, amongst them AFT-leflunomide. If it had to withdraw this drug its reputation for reliability could suffer. Rheumatologists prescribing AFT-leflunomide, and pharmacies dispensing it, will have to turn elsewhere. If AFT succeeds at trial it cannot expect to resume its market share. There may well be at least one other generic supplier in the market. [64] The second distinguishing feature is that Pharmac has declared its hand. All of the concerns that Sanofi first expressed when bringing this present application have been dispelled by Pharmac's successive undertakings. Pharmac has undertaken not to take any decision adverse to Sanofi, relying on AFT's place on the Pharmaceutical Schedule, until these proceedings are resolved by judgment or agreement. [65] Pharmac has not, of course, given Sanofi the wider undertaking that it seeks and Sanofi still argues that the damage it may suffer if AFT remains in the market will be irreparable. AFT's mere presence will depress the price any new entrant, whether Novartis or Apotex, or both, can expect from Pharmac. Absent AFT from the market, Sanofi argues, Pharmac will be unable to use the AFT-leflunomide priceas a discipline. Sanofi's share of the market will be less likely to be eroded and its price more likely to remain secure. [66] If that is Sanofi's logic, I am unconvinced. Sanofi now faces generic product competition from three sources. Even if AFT drops out the fact that it was in the market for in excess of two years at a price point significantly lower than that occupied by Sanofi, and the market share AFT garnered, will govern any negotiation between Novartis and Pharmac. Apotex may not yet be in the market but it could well be soon and Novartis will then be competing against Apotex as much as Sanofi. [67] Sanofi looks to Pharmac, in truth, for an undertaking that its price will remain as it is and that no generic supplier will be let into the market at a lesser price until this case is resolved. Pharmac is entitled to reject that as calling for an assurance extending well beyond this case compromising its ability to discharge its statutory function. The reality is also that Sanofi has no need for such an undertaking. [68] Insofar as Sanofi seeks protection against AFT until trial, it has that under Pharmac's undertaking. Insofar as Sanofi is at risk from generic suppliers other than AFT it has the ability to protect itself. It can do what it did not do when AFT entered the market. It can assert immediately the monopoly right it claims by its 1997 patent. It can seek quia timet injunctive relief. That, I understand, is what it intends to do.Conclusion[69] Standing back, the overall justice of this case seems to me for these reasons to point decisively against Sanofi obtaining the grant of interim injunctive relief it seeks. Sanofi's application is declined. AFT, I should have thought, is entitled to an award of costs at scale 2B. If that cannot be agreed AFT is to file a memorandum within ten working days of the date of this decision and Sanofi is to file a memorandum in reply within the succeeding ten working days. _____________ P.J. Keane J