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Amgen Settles Drug Patent Fight

Genentech will receive an undisclosed amount in a dispute involving cancer-related medicine.

August 28, 2003|Denise Gellene | Times Staff Writer

The nation's largest biotechnology companies, Amgen Inc. and Genentech Inc., on Wednesday ended their long-running legal dispute over Amgen's blockbuster drug Neupogen.

Amgen said it agreed to pay its rival an undisclosed amount to settle the 1996 patent infringement suit. The Thousand Oaks-based company said the settlement would result in a charge of less than 5 cents a share, or less than $64 million, in the third quarter.

The dispute involved the method that Amgen uses to produce Neupogen, a drug used to treat chemotherapy-related infections. Genentech claimed that Amgen infringed three patents covering production of biotech drugs in bacterial cells.

The patents, based on discoveries made in the early 1970s, expired after the suit was filed.

A trial was scheduled to begin Tuesday in U.S. District Court in San Francisco.

Representatives of the companies said they were pleased to put the lawsuit behind them and said the agreement was in the best interest of shareholders and patients.

Amgen said in a news release that the settlement applied to Neulasta, a longer-acting version of Neupogen that was not on the market when the suit was filed. Amgen expects combined sales of the drugs this year of $2.4 billion to $2.6 billion.

The suit has had a complicated history.

A federal judge in San Francisco dismissed it in 1999. But last year a federal appeals court in Washington returned the case to the lower court, saying the dismissal by U.S. District Judge William Alsup was based on a faulty interpretation of terms used in the patents. The terms described the "control regions" of genes that instruct the bacterial cells to produce human proteins.

The legal settlement was announced after the market closed. Shares of both companies fell slightly in after-hours trading.

Amgen traded as low as $65.54, after closing for the day up 20 cents at $65.73 on Nasdaq. South San Francisco-based Genentech fell to $73.53 after hours, after closing up 65 cents at $79.15 on the New York Stock Exchange.

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