Amgen and Massachusetts General Hospital settle royalty payment
BOSTON --Drugmaker
The one-time payment will free Amgen from obligations to pay future royalties from North American sales of Enbrel, the hospital said in a news release Tuesday after the settlement was reported in The Boston Globe.
The hospital will continue to earn royalties on sales of Enbrel made outside North America.
Combined royalties from Enbrel accounted for nearly $65 million of the hospital's $90 million in licensing fees last year, hospital spokeswoman Peggy Slasman said.
"We can use this one-time payment to invest in the research program at the hospital at a time when funding from the National Institutes of Health has been cut off significantly," Slasman told The Associated Press.
The arthritis drug's creation stems from research done at Massachusetts General led by a Harvard University researcher. The hospital signed a licensing agreement with Immunex Corp., the Seattle-based company the initially developed Enbrel in the 1990s.
Amgen, based in Thousand Oaks, Calif., acquired Immunex in 2001 and began reviewing its licensing contracts.
Amgen spokesman David Polk said his company was "pleased to reach an amicable resolution to this issue."
Under the royalty agreement, Amgen's obligations to the hospital have increased with Enbrel's sales growth. The drug posted $2.6 billion in sales in 2005, up 35 percent from the previous year.
Mark Edwards, a managing director of Recombinant Capital, a consulting firm, said the settlement is a show of strength for Enbrel.
"One, that Amgen would be willing to buy out the product and two, that they are strong and getting stronger and that they are willing to give the university an offer it can't refuse," Edwards said.
