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Harsh Criticism of Teva by the Court: The Company Ignored the “Warning Signs” in its Clinical Trial on ALS Patients

The Tel Aviv District Court ruled yesterday that Teva launched a “less than optimal” trial – and did not give participants a true picture - The company was ordered to return the ALS medication development license to Proneuron, and pay trial costs totaling half a million shekels - The judgment does not however allege that Teva caused damage to trial participants


Teva yesterday suffered a stinging loss after an eight-year legal battle in the Tel Aviv District Court in a lawsuit filed against it by Proneuron. The lawsuit was filed against the backdrop of a failed trial of the drug Copaxone on Amyotrophic Lateral Sclerosis (ALS) patients.

Judge Avi Zamir, in his final judgment before retiring from the bench, ruled that Teva had breached the agreement with Proneuron by conducting a clinical trial that was not well designed. He therefore instructed Teva to restore to Proneuron the license given to it to develop medication for neurodegenerative diseases and to pay high court costs in the amount of half a million shekels.

The Teva-Proneuron trial went through many twists and turns. It was the first instance, and almost the only one, in which the Supreme Court decided – some five years ago – to cancel an agreement contracted between the parties to conduct confidential arbitration, which was meant to take place in London. The Supreme Court shifted the conflict between the companies to an open and public civil trial, for reasons of public interest.

Proneuron and Teva fell out because of a clinical trial that Teva began in 2006 to test the efficacy of expanding its flagship drug, Copaxone, to the treatment of patients suffering from ALS. ALS is a severe and incurable degenerative disease leading to paralysis and death.

Proneuron, a start-up company in the medical field, claimed that Teva breached the agreement with it in its development of the drug. Teva holds the rights in Copaxone as a treatment for multiple sclerosis, but developments for treating ALS belong to Proneuron. In the agreement, Proneuron awarded Teva rights to trial the Copaxone molecule in degenerative diseases too. At the epicenter of the dispute Proneuron argued that there were serious flaws in a clinical trial that Teva conducted in ALS patients, which endangered human life. Proneuron therefore asked the court to return all its rights to it so that Proneuron could itself develop medication for the treatment of neurodegenerative diseases. For its part, Teva argued that the trial was conducted in a safe and appropriate manner.

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About 360 patients participated in the clinical trial. In the background to the Supreme Court decision to compel Teva to litigate in public in Israel was a tort claim filed by patients who had participated in the trial. The Supreme Court was of the opinion that in a legal battle against Teva, Proneuron would have the ability to extract information that the patients-plaintiffs would not be able to obtain. Some patients also filed a lawsuit against Teva, but this ended in a settlement whose details were not disclosed.

In the judgment issued yesterday, Judge Zamir ruled that there were no grounds for a claim that the medication had had an “adverse effect” on patients who participated in the trial, and that this issue was not open to discussion at all in the present court case. The clinical trial that is the subject of the legal dispute did indeed fail because it did not achieve any result in patients, but the judgment does not impose on Teva any finding of any damage having been caused to any of the trial’s participants.

Teva knew that the trial’s chances were low

The court case revolved around the question as to whether the clinical trial Teva conducted with the medication was a well-designed trial. Justice Zamir ruled that the expression “well designed,” as it appeared in the agreement between the two companies, is not an expression in the medical and scientific field, but a legal term. He therefore interprets it in a broad sense: a scientifically valid clinical trial that also meets additional accepted norms. For example, whether there was justification for the trial in the format that Teva chose, and whether there was room to continue it in view of warning signals discovered along the way.

The court notes that according to the testimonies, Teva chose to conduct the trial in ALS patients over other trial alternatives that it could have conducted – even though it knew that the trial had a low chance. The reason for this, according to the testimonies, was the relatively low cost of the trial and the possibility of carrying it out within a short time frame, that would allow it to meet the timetables of the agreement between Teva and Proneuron. Despite this, the Judge rejected the argument put forward by Proneuron that the trial format chosen by Teva arose from a desire to protect the use of the drug Copaxone as it existed at that time, and ruled that Teva acted in good faith in choosing the trial that it conducted. He said there was no “conspiracy” on Teva’s part.

The judge accepted Teva’s argument and the testimony of its experts, including senior members of its development teams, that there was justification for conducting a trial to examine the impact of Copaxone on ALS patients.

However, the judge ruled that at the start of 2006, when Teva began the trial, the time was not yet ripe to do so. He said, “It was not right to rush in and start a trial in 2006. Teva should have deepened its pre-clinical experiments (before the clinical trial in humans) or at least expanded the trial to other arms to improve the chances of success and turn it into an optimal trial.” Here the court points to Proneuron’s proving that existing studies, that were available before the trial was decided upon, had raised question marks which Teva had to address.

The court examined whether Teva had ignored the warning signs that were presented to it – for example, a letter written by research scientist Prof. Michal Schwarz of the Weizmann Institute, who approached the late Chairman of Teva, Eli Hurvitz, in 2007, about three months after the start of the trial, and warned that a trial in mice that she had carried out indicated mortality from the medicine. Hurvitz replied to Schwarz that the phenomenon of mortality in mice was known and did not reflect any risk that could arise from the trial. Schwarz responded in an immediate email in which she disagreed with the response from Hurvitz. Hurvitz forwarded the email to the research people at Teva and asked them to check the matter in order to prevent a mistake, even if the risk was “one in a million,” as he put it. Even though the experts at Teva thought that Schwarz was mistaken, they decided to consult with Professors Ruth Arnon and Michael Sela of the Weizmann Institute, who were the developers of Copaxone. The pair thought it possible to continue the trial.

However, the judge determined that studies at the pre-clinical stage on the use of the drug Copaxone for ALS had indicated failure, and therefore the transition to a clinical trial was problematic.

A conspicuous question mark on professional conduct

The affair of the ALS trial had wide coverage in the media at the time, mainly in Haaretz and TheMarker. The claims about the problematic trial led the Ministry of Health to set up a professional inquiry committee. In 2009, after a year’s work, the committee submitted its report, which contained severe findings against Teva. Among other things, the report determined that the information preceding the trial conducted by Teva was insufficient, and that the informed consent forms the trial participants were required to sign were misleading. Teva rejected the findings at the time.

It now arises from the ruling that in fact the court sees eye to eye with the findings of the inquiry report. The judge notes that after the event Teva wrote to the inquiry committee at the Ministry of Health that the “pre-clinical models” were “not conclusive,” whereas to the patients who agreed to participate in the trial, Teva wrote on the consent form they were required to sign that “a number of tests have shown positive effects.”

The Judge finds that even before it began the clinical trial, Teva knew of the existence of studies that showed actual worsening of the disease in animals following use of the development. He states that Teva ignored these warning signals and even failed to present this information in full in its professional advisor forums.

In the matter of the arguments made by Teva, the judge ultimately rules: “It is not possible to hold the stick at both ends – if the pre-clinical results are unconvincing and the clinical feasibility is unclear, either one does not start the trial at all or one launches a more comprehensive trial, one that is more optimal, that includes more familiar options, with the goal of improving the chances of success.”

Against this background, the judge rules that although Teva did not weave a “conspiracy” to embark on a problematic trial, and that there was no better trial option available, the trial that Teva did embark upon and the format the company chose were not optimal, and therefore Proneuron had the right to cancel the agreement with Teva. The court ordered Teva to return to Proneuron the technology and the intellectual property relating to the development of a cure for ALS.

Beyond the fact that the decision blocks a potential Copaxone market for Teva, had it been possible to find a successful treatment for ALS, it is primarily a blow to the image of the company, with the court calling its professional conduct into question.

Proneuron was represented by attorneys Gabi Moyal-Maor, Yaron Sobol, Menachem Abramovich and Eleanor Stark of law firm Hamburger Evron & Co. Teva was represented by attorneys Isaac Marciano, Amir Levitski and Amit Hirsch of law firm Tulchinsky Stern & Co.

link to the full version of the judgement