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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (2344)	4/15/1999 4:27:00 PM
From: rkrw	Read Replies (1) \| Respond to of 10280

I disagree with you regarding the significance of this potential royalty stream. While in the big picture it is but one piece of the pie, it is probably the second closest royalty (claritin being the first) and it is for meaningful amounts. Allegra is a $500M drug and growing. Conservatively estimate $600M in annual sales from 2001 on and thats a roughly $50M annual royalty at stake. Supposedly co-formulated versions royalties will be intact. Either way, chop about a buck a share off earnings estimates for 2001 on should they lose this arbitration. So certainly plenty of ammo at Sepracor, but losing up to $50M a year in cost free royalties will have its price. From the 10K: Sepracor is Involved In a Patent Interference In July 1997, the PTO informed Sepracor that it had declared an interference between Sepracor's use patent on fexofenadine to treat allergic rhinitis and another similar use patent application filed by it, and HMRI's use patent application on the anti-histaminic effects of fexofenadine on hepatically impaired patients. The primary objective of a patent interference, which only the PTO can declare, is to determine which party first invented the overlapping subject matter claimed by more than one party. In the course of an interference, the parties typically present evidence relating to their invention of the overlapping subject matter. The PTO then reviews the evidence and issues a patent in the overlapping subject matter to the party it believes has the earliest legally sufficient date of invention. The process to resolve an interference can take many years and the outcome of interferences varies considerably. If Sepracor loses the interference, HMRI will be issued a U.S. patent for the overlapping subject matter. Further, HMRI may not be obligated to pay the milestone or royalty payments called for in the existing agreement in which Sepracor licenses its U.S. patent rights covering fexofenadine to HMRI. If Sepracor prevails in the interference, it will retain all of its claims in Sepracor's issued patent. A favorable decision, however, does not ensure meaningful protection of Sepracor's proprietary rights. Sepracor is using arbitration to resolve the interference, and the arbitration proceeding is ongoing. The arbitrator may or may not render a decision during the first half of 1999. Once rendered, the arbitrator's decision must be submitted to the PTO for final approval.