To all: here is a post by longbond on stockhouse.ca StressGen board about comments by Nesbitt about the European patent:
stockhouse.ca
EVENT: The European Whitehead Institute patent on stress proteins, to which StressGen had an exclusive licence, was declared invalid yesterday. StessGen also reported Q3 results and held its conference call. The company reported a loss of $0.10 versus our expected loss of $0.13.
IMPACT: Neutral. Having this patent would have been a major positive for StressGen since it could have impeeded the commercialization of any products based on stress proteins unless a licence was obtained from StressGen. This alone would have justified a billion dollar plus market cap for the company. Given its more modest valuation, it is obvious that the street did not believe the patent would hold. This in no way affects StressGen’s proprietary position on HSPE7 and the potential to have a broad patent covering all stress protein fusions.
DETAILS: A very broad European patent covering the use of stress proteins for the treatment of cancer and infectious diseases had been issued to the Whitehead Institute. StressGen held an exclusive licence to this patent. In Europe, patents are easily issued and then contested, whereas in the U.S. much more work is done prior to issuing a patent, which is why a corresponding U.S. patent was never issued.
This patent was potentially a very big problem for Antigenics and others since it would have made it difficult for them to commercialize their products without a licence to the patent. Over the last four years, several companies therefore contested the patent at one point or another. Yesterday, the patent was declared invalid on grounds that it did not meet the inventiveness criteria.
This in no way impacts StressGen’s proprietary position regarding its lead product HspE7 or the potential to have a broad patent on stress protein fusions. The priority dates on those patents are 1996 and 1993, respectively. No one else has any published patent applications covering these areas (patents are published within about 18-24 months of filing) so no one else could have priority dates earlier than StressGen. There is no reason to believe these patents will not issue in due course.
In its press release, Antigenics stated that it was the only company with issued patents in the area of stress proteins (U.S. only, no European patents have been issued). However, the patents owned by Antigenics cover the use of stress proteins used as autologous vaccines and the heat shock protein complexes, both of which StressGen has no interest in.
Upcoming Events:
1. We can expect some additional clinical data on the AIN Phase II (the unblinded part of the trial) in the April-May
timeframe, perhaps earlier. Data from the blinded portion of the trial is not likely to be available until early 2002, but
this data is irrelevant given the lower dose used.
2. The Phase II trial in ano-genital warts should start over the next two months.
3. The company will be applying for orphan drug status for the indication of recurrent respiratory papilloma virus. If it
obtains it, an approval for this new indication could be obtained quickly.
4. Phase II data from the cervical cancer trial should be available next year.
RECOMMENDATION: We would take the opportunity of the weakness in the stock price to purchase. StressGen is rated Outperform (Speculative). |
