West Coast Editor

It's déjà vu with a difference.

Genzyme Corp.'s patent lawsuit in Israel - where the patent was filed - against Transkaryotic Therapies Inc. over drugs to treat Gaucher's disease recalls an earlier skirmish (and race to the U.S. market) with therapies for an enzyme-shortage disorder.

That battle for position focused on the two companies' compounds for Fabry's disease. Cambridge, Mass.-based Genzyme had Fabrazyme (agalsidase beta) and TKT, also of Cambridge, had Replagal (agalsidase alfa). Ending up the loser was TKT, which gave up efforts to win FDA approval after gaining market clearance in 27 countries. The FDA gave its nod to Genzyme's drug. (See BioWorld Today, Jan. 14, 2004.)

Both companies fought hard. In 2003, the FDA rejected TKT's application to market Replagal as an orphan drug for Fabry's, a rare genetic disorder caused by deficient activity of the lysosomal enzyme alpha-galactosidase A. Instead, the agency approved Fabrazyme as an orphan compound.

TKT could have tried for FDA approval if Replagal proved better than Fabrazyme in a head-to-head trial, but that would have been too costly and difficult to accrue, TKT said.

"It wasn't necessarily the intellectual property that kept Replagal off the market but a less-than-optimal [pivotal] trial design," said Christopher Raymond, analyst with Robert W. Baird & Co. in Chicago.

The current battle in Israel, on the other hand, concerns the IP surrounding TKT's GA-GCB (glucocerebrosidase), which is in Phase I/II trials. Genzyme says its Israeli patent covers novel culture processes that have been critical in enabling the company to produce the approved drug Cerezyme (imiglucerase) for Gaucher's disease - and accuses TKT of importing into Israel and using the GA-GCB product made by those protected processes.

"We should have expected that Genzyme would do everything in their power to throw sticks in front of anyone who might threaten its Cerezyme franchise," Raymond said.

A judge has denied Genzyme's request that TKT's drug supply be seized and destroyed. Jennifer Chao, analyst with Deutsche Bank Securities Inc. in New York, pointed out in a recent note that Genzyme does not own the gene, protein or manufacturing process for Cerezyme, which is made from Chinese hamster ovary cells. What's more, Genzyme "does not appear to have a meaningful patent position" that could block TKT in the U.S., although the firm does have patents in Europe, as well as Israel.

Chao guessed Genzyme's drug will sell $836 million in fiscal year 2005, but said the TKT drug addresses a market opportunity of $150 million to $250 million and reiterated her "buy" rating on the stock. Results from the Phase I/II trials with GA-GCB are expected in the second half of this year.

Gregory Wade, analyst with Pacific Growth Equities in San Francisco, pointed to recent good news from TKT regarding Replagal. The company pre-announced that sales of the drug in the fourth quarter of 2004 will exceed $22 million, and fiscal-year sales are also expected to be higher than the guidance of $67 million to $77 million. Sales in 2005 are estimated at $90 million to $100 million, and, in 2006, likely are to exceed $100 million, Wade wrote in a research note.

Genzyme and TKT ended their lengthy legal battle over Replagal in the fall of 2003 by signing a global settlement. Under the terms, Genzyme withdrew its lawsuit. Shortly afterward, the U.S. Court of Appeals for the Federal Circuit ruled in favor of TKT, saying that Replagal does not infringe upon Genzyme's patent. (See BioWorld Today, July 26, 2000, and Oct. 10, 2003.)

Meanwhile, Raymond said he believes TKT is "as likely" to win the current dispute over GA-GCB as the previous one over Replagal - the courtroom outcome of which was made moot by the FDA's decision to deny approval to the drug and give clearance to Genzyme's Fabrazyme.

"Handicapping IP disputes is a bit of a coin toss," he noted. "You can never be sure."

Israel might not be the only arena of dispute, added Raymond, who told BioWorld Today he remains neutral on the stock.

Genzyme might be starting the fight over Replagal in Israel rather than the U.S. because the firm didn't have much luck with U.S. judges in the earlier court skirmish, but Raymond said the conflict might migrate.

"I don't know that we're not going to see some action here in the States as well," Raymond said. "That's always been a risk with [TKT's] business model."

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