Genentech loses ruling on patent
$300m a year in royalties at stake
CHICAGO -- Genentech Inc. lost a ruling on a patent that generates an estimated $300 million a year in royalties from rivals using the technology to make cancer and arthritis treatments.
The Patent and Trademark Office rejected Genentech's so-called Cabilly II patent based on a reexamination requested by MedImmune Inc. and another party. Separately, US regulators told Genentech to stiffen a warning that the asthma drug Xolair may cause life-threatening allergic reactions.
Genentech's patent covers methods used in producing antibody-based therapies. Competitors that pay royalties to use it include Johnson & Johnson, Abbott Laboratories, and ImClone Systems Inc. The technology has been the focus of lawsuits since Genentech won the patent in 2001, including a Supreme Court ruling in January.
"Today's decision will be viewed as a negative for Genentech and a positive for MedImmune as well as other biotechnology companies that pay royalties on Cabilly to Genentech," said Geoffrey Porges, an analyst with Sanford C. Bernstein & Co. in New York, in a note to investors.
The patent, named for the inventor Shmuel Cabilly, would give Genentech royalty rights through 2018 if upheld. Licensed products that use the Cabilly patent include MedImmune's Synagis, a treatment for respiratory illness in infants; Erbitux, the cancer drug made by ImClone; and the autoimmune medicines Remicade by Johnson & Johnson and Humira by Abbott, both of which treat rheumatoid arthritis.
In a rejection notice posted Feb. 16 on the patent office's website, the patent examiner said the invention is just an obvious variation of technology already covered by earlier patents. The decision will go before an appeals board within the agency and then to the US Court of Appeals for the Federal Circuit in Washington, which specializes in patent law.
