A New Jersey federal court awarded the drug manufacturer Sandoz more than $70 million in its lawsuit against United Therapeutics after finding that the defendant blocked the sale of a generic hypertension drug.

Sandoz filed suit in 2019 in the U.S. District Court for the District of New Jersey seeking damages for breach of contract in Sandoz v. United Therapeutics, a lawsuit against the brand-name manufacturer and seller of a hypertension drug called treprostinil. After a three-day bench trial in May, U.S. District Judge Brian Martinotti found that Sandoz lost more than $137 million in profits following the launch of the generic version of treprostinil as “a natural and probable consequence” of United Therapeutics breaching a promise it made under a 2015 settlement agreement, according to court documents.

“The court finds Sandoz’s lost profits following the launch of generic treprostinil were a natural and probable consequence of UTC’s breach of its promise under the 2015 Settlement Agreement ‘not to take any action directly or indirectly to prevent, delay, limit, or otherwise restrict the launch, manufacture, use, sale, offer for sale, importation or distribution of the Sandoz ANDA Product in the United States,’” Martinotti said.

The complaint named United Therapeutics and Smiths Medical ASD, the developers of the pump required for delivering treprostinil. The six-count complaint included claims under the Sherman Antitrust Act and restraint of trade under New Jersey and North Carolina law, among other claims.

United Therapeutics developed and launched the brand-name drug Remodulin in 2002. Sandoz filed an abbreviated new drug application in 2011 with the Food and Drug Administration seeking approval for the generic version, treprostinil. United Therapeutics sued Sandoz, claiming that the generic version infringed on its patent.

A settlement was reached in September 2015, which stated that United Therapeutics would not take any action to prevent Sandoz from issuing its generic drug. However, the complaint alleged that after United Therapeutics learned that Sandoz was ready to launch treprostinil, the company asked Smiths Medical to execute agreements with specialty pharmacies to restrict the sale of cartridges used in the pump to Remodulin only. Smiths Medical agreed and allowed United Therapeutics to approve every cartridge sale it made to specialty pharmacies until those pharmacies agreed to limit the sale of cartridges using Remodulin.

Martinotti awarded damages in the principal amount of $61.6 million, plus prejudgment interest of $8.9 million, on its breach-of-contract claim against United Therapeutics.

An Alston & Bird team, including partners Matthew Kent, Jonathan Parente, Steven Penaro, Andrew Hatchett and Jenny Kramer, represented Sandoz. The attorneys did not return messages seeking comment.

Martinotti noted that Sandoz was required to meet a reasonable certainty standard, which necessitated proof that the damages were a “natural and probable consequence” of the breach. Second, a party must demonstrate an appropriate method for quantifying that loss.

After holding that United Therapeutics met the proof standard on the first prong, Martinotti evaluated the method for quantifying the loss by turning to the expert testimony presented at trial. Dr. Anupam Jena, an economist, physician and professor at Harvard Medical School, testified that for Sandoz and was found to be credible and reliable, according to Martinotti. United Therapeutics’ expert, Dr. Sean Nicholson, a health care economist and professor at Cornell University, provided an analysis of Jena’s damages calculations but was deemed less credible by the court.

After issuing findings of fact in a September decision, Martinotti instructed the parties to confer and to submit a proposed form of judgment. However, the two sides could not come to an agreement. Sandoz wanted a principal amount of nearly $63.5 million and prejudgment interest of more than $17 million. United Therapeutics proposed more than $61.6 million in principal and prejudgment interest of nearly $3.5 million.

Martinotti settled on a principal amount of $61,643,25 and prejudgment interest of $8,956,749 in his Nov. 1 order.

United Therapeutics was represented by Stephen M. Orlofsky and Michael R. Darbee of Blank Rome, who declined to comment.