Posted at 12:43 a.m. PDT Thursday, May 11, 2000
Biotech patent violation lawsuit watched closely
Dow Jones News Service
NEW YORK -- As far as the biotechnology industry is concerned, an upcoming case could speak volumes about whether patents that some contend have grown too broad are enforceable.
Starting Monday in Boston, U.S. District Court Chief Judge William Young will preside over a suit in which industry bellwether Amgen Inc. alleges that Transkaryotic Therapies Inc. and its distribution partner, French pharmaceutical giant Aventis SA, violated patents for its anemia-fighting drug Epogen.
Hanging in the balance could be billions of dollars worth of drug sales, as well as the future of Amgen's largest selling product.
``It's a big deal. You are talking about almost $2 billion in product sales that are at risk for Amgen,'' said Dresdner RCM Global Investor analyst Camilo Martinez.
At the heart of the case is erythropotein, or EPO, the generic name of a drug that boosts the number of red blood cells in patients undergoing kidney dialysis. Amgen makes its version, Epogen, by inserting a human gene into hamster ovary cells which then produce the protein.
Transkaryotic's yet-to-be-marketed drug, GA-EPO, also is erythropotein, but is developed by a different method. Transkaryotic activates silent genes in human cells, by inserting a promoter into the human gene's sequence that then directs the cell to generate the protein.
While the two methods of production appear dissimilar, Amgen alleges Transkaryotic, a small, Cambridge, Mass.-based firm, is infringing on patents protecting its exclusive rights to the protein and method of production.
Epogen, which is Amgen's blockbuster product, generated $1.8 billion in sales for the company in 1999. Worldwide sales of Epogen total about $4 billion, including sales of Johnson & Johnson's version of the drug, marketed under the name Procrit, as part of a licensing agreement.
Industry insiders are consumed by the case because of a long-standing question: Does the creation of a new process for making a drug mean that a company has developed a new drug?
Companies that derive large sales from gene-based pharmaceuticals are worried their blockbuster drugs could fall victim to smaller insurgents.
``People are looking at the intellectual property of erythropotein to see if it holds up, and are thinking if Transkaryotic is able to get around Amgen's patents then other well known biotech drugs like Amgen's Neupogen or Genentech Inc.'s growth hormone are susceptible as well,'' said SG Cowen & Co. analyst Eric Schmidt.
Genentech officials declined to comment.
The U.S. Patent and Trademark Office has allowed broadly-written patents in order to guarantee new developments and continued investment. But critics are now complaining that these protections have damped innovation.
``(Biotechnology companies) are pushing the envelope to protect first-generation technology and trying to enforce it against second-, if not third-, generation technology,'' said Stephen Bent, a patent attorney with Foley & Lardner in Washington, DC.
Amgen and Transkaryotic have argued several pretrial motions, culminating in an April summary judgment that Transkaryotic and distribution partner Aventis infringed one of Amgen's five patents, which covers erythropotein. But the judge declined to rule on patents governing the method of producing the protein, opting to leave that for trial.
Because it was found to have violated Amgen's patent for erythropotein, Transkaryotic must convince a judge that Amgen's patents are invalid and unenforceable.
Representatives for Amgen and Transkaryotic declined to comment on the case or legal strategies, citing company policies banning remarks on pending litigation. |
