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Glaxo, Genentech Reach Settlement


British drug maker GlaxoSmithKline said Thursday that it settled litigation against Genentech Inc. that claimed its rival infringed patents covering monoclonal antibodies--cells grown in large fermentation tanks that can be programmed to attack disease.

The companies did not disclose details of the confidential settlement, which ends two separate legal actions.

As a result of the settlement, Glaxo dropped its appeal of a May 2001 jury verdict in favor of Genentech. A federal jury in Delaware found that Genentech's two most successful drugs, the cancer medications Herceptin and Rituxan, did not infringe Glaxo's patents.

Glaxo's second suit against South San Francisco-based Genentech was scheduled for trial in the same court in April.

The suits dealt with the use, preparation and production of specific kinds of antibodies to cure diseases, including cancer. Genentech has maintained that Glaxo's technology played no role in the development of Rituxan and Herceptin and that Genentech's scientists as well as others in the field developed the technology that Glaxo claimed to have invented.

As part of Thursday's settlement, Genentech dropped an inequitable conduct claim against Glaxo stemming from the first lawsuit, a Glaxo representative said.

Rituxan, a non-Hodgkin's lymphoma treatment Genentech co-markets with Idec Pharmaceuticals Corp. of San Diego, had sales of $522.5 million for the first six months of 2002. Sales of breast cancer medication Herceptin were $181.9 million for the same period.

The settlement with Glaxo comes less than two weeks after Genentech prevailed over Chiron Corp. of Emeryville, Calif., in a patent infringement case that also involved Herceptin. A federal jury in Sacramento found that Chiron's patent on a breast cancer antibody was not valid and therefore did not apply to Herceptin. Chiron has said it intends to appeal the ruling.

Glaxo shares closed at $35.18, off $2.39, and Genentech fell $1.10 to $30.25, both on the New York Stock Exchange, on a day when the markets also were down.

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