UPDATE 1-U.S. Supreme Court rejects Vanda Pharmaceuticals case over sleep-drug patents

(Adds Vanda and Teva comments in paragraphs 4-6)

By Blake Brittain

WASHINGTON, April 22 (Reuters) - The U.S. Supreme Court on Monday declined to hear a bid by Vanda Pharmaceuticals to revive patents for its sleep-disorder drug Hetlioz that were previously declared invalid in a dispute with generic drugmakers Teva and Apotex.

The justices turned away Vanda's appeal of a ruling by the patent-focused U.S. Court of Appeals for the Federal Circuit against the company, which in 2018 had sued Teva and Apotex in Delaware for patent infringement after they applied to make generic versions of Vanda's Hetlioz, a circadian-rhythm drug used to treat rare sleep disorders.

In the case, the Supreme Court declined a chance to consider for the first time since 2007 when a patent can be invalidated as "obvious" based on earlier publications describing the same invention.

"The Federal Circuit's obviousness standard materially departs from the Supreme Court's longstanding holdings," Vanda attorney Paul Hughes said. "While we are disappointed that the Supreme Court declined review of this case, we remain hopeful that the court will ultimately correct the governing standard."

"Doing so is imperative in the pharmaceutical context, to ensure that life-changing therapeutics are timely developed and reach underserved patients," Hughes added.

A Teva spokesperson said that the company was pleased with the Supreme Court's action. Representatives for Apotex did not immediately respond to a request for comment.

Washington-based Vanda earned more than $100 million from sales of Hetlioz in 2023, according to a company report.

U.S. District Judge Colm Connolly ruled against Vanda and cleared a hurdle for the generics in 2022. Connolly found Vanda's patents invalid based on clinical trial results, U.S. Food and Drug Administration guidance and other documents that, when combined, would have made the patented inventions obvious to a scientist in the field.

The Federal Circuit upheld the decision in 2023. Vanda asked the Supreme Court in January to hear its appeal.

Vanda told the justices that the Federal Circuit has "charted its own course" and adopted a lower standard than the Supreme Court mandated for determining obviousness.

"Most relevant here, it threatens to render many advancements in drug development unpatentable," Vanda said. "That is an especially pernicious result for rare diseases, where patent-based incentives are crucial for innovators to invest the billions required to develop new, successful treatments."

Israel-based Teva and Canada-based Apotex responded that Vanda was merely trying to extend its patent monopoly on Hetlioz and that the case "involves nothing more than the routine, fact-bound application of settled obviousness law."

(Reporting by Blake Brittain in Washington; Editing by Will Dunham)