Litigation Settlement Reached Between Tercica, Genentech and Insmed Companies Partner Through License and Development Agreement
BRISBANE, Calif. & RICHMOND, Va., Mar 06, 2007 (BUSINESS WIRE) -- Tercica, Inc., (Nasdaq:TRCA) and Insmed Incorporated (Nasdaq:INSM) today announced that Tercica, Insmed and Genentech, Inc. (NYSE:DNA) have entered a Settlement, License and Development Agreement that resolves all outstanding litigation between the companies, including the patent infringement suits brought by Tercica and Genentech against Insmed in the United States (N.D. Cal.) and United Kingdom, and the unfair business practices suit (E.D. Virginia). The key elements of this settlement are:
-- Insmed will no longer provide IPLEX(TM) to patients with severe Primary IGF-1 Deficiency and other short stature indications and will withdraw its IPLEX marketing authorization application for severe Primary IGF-1 Deficiency in the European Union.
-- Through licensing and development rights granted by Tercica and Genentech, Insmed will have freedom to operate regarding the manufacture, development and commercialization of IPLEX for certain non-short stature indications including severe insulin resistance, myotonic muscular dystrophy and HIV associated adipose redistribution syndrome (HARS), subject to opt-in rights and royalty provisions for Tercica and Genentech.
-- Tercica and Genentech have waived the damages award by the jury in the U.S. patent infringement litigation.
In a joint statement, Dr. John A. Scarlett, Tercica's President and Chief Executive Officer, and Dr. Geoffrey Allan, Insmed's President, Chief Executive Officer and Chairman of the Board of Directors, stated, "We are very pleased with our new licensing and development relationship. It allows Tercica to focus its efforts in the short stature market and allows Insmed, in cooperation with Tercica and Genentech, to focus its IPLEX development efforts in valuable non-short stature indications."
U.S./Canada IPLEX Sales for Tercica/Genentech Indications
As a consequence of the court's finding that Tercica's patents were infringed, Insmed will no longer be able to provide IPLEX in the U.S. for severe Primary IGF-1 Deficiency and the following indications: Primary IGF-1 Deficiency, Noonan's Syndrome, Laron Syndrome, Growth Hormone Deficiency, and all other short stature indications; and Adult Growth Hormone Deficiency. These indications are collectively referred to as "the TRCA/Genentech Indications." Insmed and Tercica will work closely together with pediatric endocrinologists to identify therapeutic alternatives for children currently receiving IPLEX, and where appropriate, to transition patients to Increlex(TM).
IPLEX Worldwide License and Development Agreement
The parties will form a joint development (and subsequently, a joint commercialization) committee to guide the development and commercialization of IPLEX in non-Tercica/Genentech Indications. Tercica (along with Ipsen, for Ipsen's Increlex territory) and Genentech will have the right to opt into Insmed's development and commercialization of each non-Tercica/Genentech Indication up to 90 days after Insmed provides "Phase III-enabling" clinical data. Tercica will have the first right to opt into orphan indications, and Genentech will have the first right to opt into non-orphan indications. If Tercica does not opt into an orphan indication, Genentech will have the right to opt-in. Similarly, if Genentech does not opt into a non-orphan indication, Tercica will have the right to opt-in. In the case of an opt-in, Insmed will retain development control prior to approval, and Tercica or Genentech would gain commercial control after approval.
If the opt-in is exercised by Tercica, Insmed would be reimbursed 50% of its incurred development costs for the indication and further development costs would be shared 50:50. Upon subsequent commercialization, Insmed and Tercica will split profits 50:50 after accounting for relevant expenses including sales-based tiered royalties of 6%-15% to Genentech.
If the opt-in is exercised by Genentech, Insmed would be reimbursed 50% of its incurred development costs for the indication. Subsequent development costs and profits will be split 50:50, but no royalty will be owed to Tercica.
If neither Tercica nor Genentech opts in, Insmed will pay a 4% royalty on all commercial sales of the approved drug to Genentech.
Worldwide Pre-Approval IPLEX Sales
Outside the U.S. and Canada, Insmed will be permitted to continue to provide IPLEX to physicians through its Expanded Access Program for non Tercica/Genentech indications (excluding severe insulin resistance) and ALS in Italy. Any cost reimbursement obtained from this program would be subject to a tiered royalty of 4% to 15% shared between Tercica, Genentech and Ipsen.
The Settlement, License and Development Agreement is in effect until the later of 2018 or the expiration of any subsequent Tercica/Genentech issued patents that cover IPLEX or its indications.
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Never did understand why people thought INSM was in the driver seat all the way thru this process, even after the court decision. The chatter was that it came down to ego (less so $$$) why IPLEX for short stature was blocked in the settlement. |
