Trial Concludes; Arguments Given; Decision Expected in Several Weeks:
one article:
aolpf.marketwatch.com
another article, from Bloomberg:
Amgen, Transkaryotic End Arguments in Epogen Trial
Boston, Sept. 8 (Bloomberg) -- Amgen Inc. and smaller rival Transkaryotic Therapies Inc. fought over the validity of patents on the top-selling anemia drug Epogen, as lawyers concluded arguments in a patent-infringement trial that could shape the future of the biotechnology industry.
U.S. District Judge William Young, calling the case a ``fascinating legal puzzle,'' must decide whether Transkaryotic infringed patents for Epogen, Amgen's anemia treatment developed by genetically engineering a copy of a human protein.
Transkaryotic's lawyers argued that Amgen's patents were obtained without disclosing material information to government examiners and are invalid. Amgen's attorney countered that Transkaryotic failed to prove that patent examiners were misled.
Shares in Amgen, the world's largest biotechnology company, rose 2.94, or 4 percent, to 74.94, shooting up after arguments concluded. Transkaryotic shares fell 3.50, or 8 percent, to 38.
``It's reasonable to assume that Amgen is in an advantageous position,'' said Merrill Lynch analyst Eric Hecht. ``Amgen's stock is priced for victory.''
Hecht said investors have already factored an Amgen win into their assumptions, though he urged caution.
``The right way to think about this case is that it's too complex and we shouldn't think we're too smart,'' Hecht said. ``Investors need to be careful.''
Should Young eventually rule in Transkaryotic's favor, he said, Amgen's stock ``will get crushed.''
Validity Questioned
Transkaryotic's lawyers devoted most of their closing arguments to challenging the validity of the Amgen patents, rather than contesting claims that the patents were infringed.
``Amgen wants to preclude far more than it invented,'' Transkaryotic attorney James Haley contended. ``That abuses the patent system. It abuses the public and it abuses Transkaryotic.''
Transkaryotic attorneys said Amgen failed to disclose material information to patent examiners, rendering their patents unenforceable. Transkaryotic lawyer Herbert Schwartz said filing notification with the U.S. Patent and Trademark Office -- not the examiners reviewing the patent applications -- is insufficient.
``It's common sense,'' Schwartz said. ``The patent office -- (they) don't really know what goes on in the world.''
Amgen argued that Transkaryotic never proved that material information was withheld from examiners.
``They . . . ask you draw adverse inferences and ignore the complete record,'' said Lloyd ``Rusty'' Day, an Amgen attorney.
``The greed here is the defendants who wish to take (our) product and sell it,'' he added.
`No Surprises'
``There are no surprises here, (Transkaryotic lawyers) have been summarizing the same arguments they have been making throughout the trial,'' said Elise Wang, a PaineWebber Inc. analyst, who said Transkaryotic failed to prove its case.
Jon Alsenas, a portfolio manager at ING Furman Selz Asset Management, who has been closely watching the case, saw things differently. Alsenas said he thinks the trial went in Transkaryotic's favor and that Amgen can only win if the judge rules it owns any form of the protein used in Epogen, no matter how it is made.
``It's very difficult for people to imagine the biggest company in the industry suddenly becoming a small company in the industry because of this lawsuit, that that could very well happen,'' he said.
Transkaryotic's lawyers also contended the Amgen patents should be found invalid because they didn't include adequate descriptions to guide anybody skilled in the field how to make and use the invention. This is called enablement, and is a requirement in patents.
``Transkaryotic was trying to throw everything against the wall hoping that something would stick,'' said Meirav Chovav, an analyst with Salomon Smith Barney. ``Transkaryotic was basing most of their discussions on generalities and things out of context. Amgen basically refocused the judge on the real issues in the context of legal precedent.''
A victory by Cambridge, Massachusetts-based Transkaryotic would make it easier for up-and-coming gene therapy companies to challenge the established pharmaceutical companies' dominance, patent experts say.
Legal Puzzle
``The judge said it's a legal puzzle and the framework is challenging,'' said Robert LeBoyer, an analyst with Leerink, Swann & Co. ``But he's going to have to draw the distinctions and reconcile these opposing points of view.''
Young occasionally interrupted attorneys during closing arguments, to ask his own questions and comment on the case's complexity. He did not issue a ruling from the bench today, and warned attorneys yesterday it may take him some time to reach a decision.
Thousand Oaks, California-based Amgen is fighting to keep a tight grip on its signature drug Epogen, a version of the human protein erythropoietin. The drug has an estimated U.S. sales of $4 billion in 2000 and is given to kidney dialysis patients, who often become anemic, to help stimulate red-blood cell production.
Approval Sought
Amgen sued Transkaryotic and Aventis SA predecessor Hoechst Marion Roussel Inc., saying the companies were infringing five of its patents by developing another version of erythropoietin. Amgen wants Transkaryotic stopped before its drug goes on the market. Aventis filed last month with U.S. and European regulators for permission to sell a version of Epogen produced using Transkaryotic's methods.
Transkaryotic says it didn't infringe Amgen's patents because it used a different method to develop erythropoietin. While Amgen inserts a cloned gene into an animal cell to make its product, Transkaryotic has developed a method of inserting a DNA sequence into a human cell. The DNA sequence functions as a ``switch'' that causes the cell to produce erythropoietin.
Competing Products
If Transkaryotic prevails, it could also open the door for other companies to make competing versions of other Amgen products, such as Neupogen, which is used to prevent infections in chemotherapy patients.
Besides marketing Epogen itself, Amgen licenses the drug to Johnson & Johnson, which sells it in the U.S. as Procrit and in Europe as Eprex, a treatment for anemia caused by other than kidney damage.
Johnson & Johnson has boosted Procrit sales through television and radio advertising targeting patients suffering from anemia due to cancer therapy or HIV infection.
Transkaryotic has yet to put a product on the market. The company was sued in July by Genzyme Corp. for allegedly infringing a patent for a drug that treats Fabry disease, a rare metabolic disorder.
Sep/08/2000 16:56 ET |
