Johnson & Johnson v. Samsung Bioepis — Third Circuit Holds Market-Share Loss from Biosimilar Competition Is Not Per Se Irreparable Harm

Background

Janssen developed and patented ustekinumab, a blockbuster biologic marketed as Stelara for treating conditions including plaque psoriasis, Crohn’s disease, and ulcerative colitis. Over its fifteen-year effective patent life, Stelara generated over $70 billion in sales. When Janssen’s composition patent expired in September 2023, Samsung obtained FDA approval for its biosimilar, SB17. The companies settled resulting patent infringement litigation with a Settlement Agreement that granted Samsung a limited license to sell SB17 starting in February 2025 — but prohibited Samsung from sublicensing its patent rights except to “commercialization partners” who would sell “on behalf of” Samsung.

Samsung subsequently entered agreements with Sandoz (as its commercialization partner) and also with Quallent Pharmaceuticals — a subsidiary of the Cigna Group, a vertically integrated healthcare conglomerate. The Quallent deal allowed Cigna’s subsidiary to distribute the biosimilar under its own private label. Janssen sued, claiming that the Quallent sublicense breached the Settlement Agreement because Quallent was not selling “on behalf of” Samsung. Janssen sought a preliminary injunction, arguing that Cigna’s ability to steer roughly 23% of the prescription market to its own private-label biosimilar would cause irreparable harm.

The Court’s Holding

Judge Krause, writing for the panel, affirmed the district court’s denial of the preliminary injunction. While the court assumed that Janssen was likely to succeed on the merits of its breach-of-contract claim, it held that Janssen failed to demonstrate irreparable harm — the gateway prerequisite for injunctive relief.

The court rejected four arguments from Janssen:

Market-share loss is not per se irreparable. Janssen cited Novartis Consumer Health v. Johnson & Johnson-Merck for the proposition that loss of market share automatically constitutes irreparable harm. The court distinguished Novartis on three grounds: (1) that case involved actual, measured market-share losses in a brand-loyal market, unlike here where the effects were still speculative; (2) Novartis arose under the Lanham Act, where a presumption of irreparable harm applied; and (3) subsequent developments — including the Supreme Court’s Winter and eBay decisions — have moved away from presumptions of irreparable harm in non-trademark contexts.

Difficulty measuring damages is not enough. The court held that damages need not be “impossible” to calculate — they must merely be practically incapable of measurement. But here, Samsung’s expert showed that losses from biosimilar competition are “relatively modest” and “quantifiable,” undermining any claim that monetary damages were inadequate.

Lost negotiating leverage is speculative. Janssen argued that Cigna’s entry would weaken Janssen’s position in future negotiations with PBMs and insurers. The court found this too speculative to support preliminary relief, noting that no cited case had treated loss of negotiating power alone as sufficient for irreparable harm.

Key Takeaways

• Biosimilar market-share loss does not automatically qualify as irreparable harm. Even in complex pharmaceutical markets with vertically integrated competitors, courts require concrete, non-speculative evidence that monetary damages are inadequate.
• Patent settlement agreements with sublicensing restrictions must be enforced through damages, not injunctions, unless truly irreparable harm is shown. Originators cannot rely on market complexity alone to obtain preliminary relief against licensee breach.
• Vertically integrated healthcare companies have broad latitude to enter biosimilar markets via private-label arrangements — even if the arrangement arguably breaches an upstream patent settlement, the originator’s remedy may be limited to money damages after trial.

Why It Matters

This decision has immediate practical consequences for the biosimilar industry. With major biologics like Stelara, Humira, and others losing exclusivity, brand-name manufacturers have relied on patent settlement agreements — and particularly sublicensing restrictions — to control how and when biosimilar competition enters the market. The Third Circuit’s ruling makes clear that even plausible breach-of-contract claims will not easily translate into injunctive relief that blocks a biosimilar from reaching patients.

For vertically integrated healthcare companies like the Cigna Group, the decision validates the private-label biosimilar strategy: even if a sublicense agreement is later found to breach an upstream settlement, the competitive entry continues during litigation while the originator pursues damages at trial. This dynamic is likely to accelerate private-label biosimilar launches and further erode brand-name biologic market shares.