While she was the in-house lawyer for generic drug company Teva Canada in Toronto for eight years, Ildiko Mehes helped the Israeli-owned company acquire several smaller generic firms. “At that time,” she recalls, “I used to joke how lucky I was being a patent lawyer doing M&A work.” If only she could have seen the future.
Fast-forward to 2015, and Mehes is U.S.-based general counsel for Teva Pharmaceutical Industries Ltd.’s largest business unit, North American Generics. (Teva is the world’s largest generic drug maker.) She is playing the snakes-and-ladders game in which big pharma companies attempt to become even bigger.
In April 2015, Teva offered to acquire Mylan NV, the second-largest generic and specialty pharmaceuticals company in the world for US$40 billion – a fortnight after Mylan tried to buy Perrigo Company PLC for US$29-billion as a poison-pill defence.
In July, Teva abandoned its bid for Mylan, and instead bought Allergan Inc.’s generic business for US$40.5 billion, solidifying Teva’s position as the world’s leading maker of generics. Allergan, known for its Botox anti-wrinkle treatment, had become the third-largest generic drug maker in the U.S. after merging with Actavis PLC in March.
“It’s been extremely busy, but very exciting,” says Mehes. “The Allergan deal came about very quickly. We worked around the clock to make it happen. That’s the nature of M&A. Things change. New opportunities arise.”
And while the takeover bids were in progress, Mehes was also busy negotiating a US$1.2-billion settlement with the U.S. Federal Trade Commission to resolve claims that Cephalon Inc., which Teva acquired in 2012, unlawfully delayed generic drugs from being marketed in competition with its sleep-disorder drug Provigil.
But let’s rewind.
The Budapest-born Mehes arrived in Canada at age seven. Retaining Hungarian as her mother tongue, she mastered English and French while growing up in Montreal, later moving to Toronto to study at Osgoode Hall Law School.
She spent five years as an articling student and an associate at Goodmans LLP, specializing in intellectual property and commercial litigation. Through one of her clients, Apotex Inc., the country’s largest generic drug manufacturer, she was exposed to the pharmaceutical industry.
“I always wanted to be a litigator,“ she says. “When I got to Goodmans, I realized very quickly that the lawyers who were working on patent litigation matters representing clients like Apotex were in court a lot, and that appealed to me. Most of the cases didn’t settle. Apotex and Goodmans were at the forefront in pushing the envelope on new arguments. Goodmans at that time was very much a sink-or-swim kind of place. That didn’t work for everybody, but it worked for me.”
When Mehes wished to start a family, however, she realized her hours at Goodmans were “not consistent with my being the kind of parent I wanted to be.” She interviewed at Teva Canada, which had acquired Novopharm a few years earlier. In 2005, she became the first lawyer at Teva Novopharm, taking charge of IP and litigation management.
“As the only in-house lawyer, I went from being a pharmaceutical patent lawyer to becoming a generalist very quickly.” (By the time she left Teva Canada in 2013, she had an in-house team of seven lawyers. She also forged relationships with external counsel whom the company continues to draw upon today at Aitken Klee LLP and Bennett Jones LLP.)
Mehes quickly grew to like the “intersection of law and business.” She assisted in taking an unprofitable company with a weak drug pipeline and building an industry-leading pipeline of more than 65 products. She successfully litigated several of the largest exclusive generic launches in Canadian history (e.g., generic versions of Wyeth’s anti-depressant Effexor and Eli Lilly’s anti-psychotic Zyprexa).
During these years, Teva Canada became more aggressive in challenging the patents of brand-name pharmaceuticals. In particular, it tried to establish “a legitimate winnable position” against Pfizer Canada’s patent for Viagra. “We were the first jurisdiction in the world where the Viagra patent was challenged,” she says.
The patent challenge did not require the approval of either Teva’s Israeli head office or the U.S. headquarters, says Mehes. “It would today, but at that time we had incredible autonomy in Canada.” After losing at trial, we had a lot of discussion with outside counsel David Aitken [then at Osler Hoskin & Harcourt LLP] about whether to appeal.”
After a second setback at appellate court, “seeking leave to appeal to the Supreme Court was not an obvious decision at the time,” she says. “Once we made the decision to proceed, it was about trying to frame the argument as clearly and simply as possible.”
The Teva legal team argued that Pfizer’s patent was invalid because, as Mehes colourfully contended, it attempted to “hide a leaf in a forest.” The effective ingredient was buried among a slew of chemical compounds listed in the patent. This, thereby, breached the inherent bargain of patents: “having to disclose to the public what your invention is in exchange for a time-limited monopoly.”
Says Mehes, “David Aitken, Marcus Klee and I spent several weeks in Ottawa in a room together developing every word of that argument. There was no argument that was more over-thought, over-analyzed from every direction. We wanted to keep the argument simple, we didn’t want to get into the technicalities of patent law. We left the court that day feeling very good. We had a big lunch celebration in Ottawa.“
The high fives were vindicated when the SCC issued its ruling in Teva Canada Ltd. v. Pfizer Canada Inc. in November 2012. In a landmark ruling on patent disclosure, the Supreme Court unanimously held that the Pfizer patent for Viagra was “invalid.” The way was clear for Teva Canada to manufacture a generic version of the little blue pill. “It was one of the highlights of my career,” recalls Mehes.
In mid-2013, she was promoted and relocated to North Wales, Penn., a suburb of Philadelphia, to lead the legal team of the company’s largest business unit, North America Generics. Mehes oversees seven lawyers (including Benjamin Gray, the current GC for Teva Canada) and reports to David Stark, the GC for Global Markets.
Almost two years ago, the then-CEO, Americas Generics named Mehes as interim leader (for 10 months) of the U.S. New Product & Portfolio organization with responsibility for the generic medicines pipeline and new product launches. “I really had the opportunity to bridge the legal side and the business side,” she says.
“As I look to the future, I think, as do many in-house counsel, about what is the right way to transition into a business role down the road. If I look back at the last 10 years at what I’ve done, both in Canada and the U.S, it’s drive value creation. For me, that is front and centre in what I do every day.”
