West Coast Editor
In a long-standing war between an East Coast and a West Coast firm over erythropoietin (EPO) patents, Transkaryotic Therapies Inc. lost a battle on its home turf to Amgen Inc. when a federal judge upheld four of Amgen's claims, ruling that the company's patents are valid and have been infringed by TKT.
Wall Street took the news in stride. TKT's stock (NASDAQ:TKTX) closed Monday at $17, up 21 cents. Amgen's shares (NASDAQ:AMGN) ended the day at $56.63, up $1.41, on a generally strong day for the market.
"From the Amgen side, we could be seeing a little bit of a relief rally on perceived overhang," said Jennifer Chao, analyst with Deutsche Bank Securities Inc. in New York, although "the threat of those patents being overturned wasn't in the stock," she added.
With TKT, investors probably took advantage of weakness to buy shares ahead of the next clinical event - pivotal data from a trial with iduronate-2-sulfatase for Hunter syndrome expected in the second half of 2005.
The most recent EPO decision by U.S. District Court Judge William Young in Boston dealt with issues remanded to him by an appeals court having to do with two Amgen patents on the product itself and two related to making EPO, a treatment for anemia in kidney disease patients who are on dialysis.
Named in the action along with TKT, which vowed to appeal the latest ruling, was partner Aventis Pharma AG, of Frankfurt, Germany. Cambridge, Mass.-based TKT's Dynepo (epoetin delta), which is gene-activated EPO, is being developed in the U.S. with Sanofi-Aventis, of Paris.
Michael Astrue, president and CEO of TKT, said the latest decision "misreads the law, discourages innovation, exports biotechnology manufacturing jobs overseas, and denies patients in the U.S. an important alternative product."
Chao said TKT has "nothing to lose [by appealing] at this point, given that 90 percent of their court costs have already been sunk into fighting the fight." Whether the federal circuit will entertain yet another appeal remains in question, she said.
"I think there's a shot that they will," Chao told BioWorld Today. "The recipe here is a skilled litigator and an open-minded panel of judges."
Amgen, of Thousand Oaks, Calif., raked in about $2.4 billion from worldwide 2003 sales of Epogen (epoetin alfa), which Johnson & Johnson markets under the trade name Procrit. Those companies have been involved in their own dispute over EPO, with an arbitrator awarding Amgen $150 million in damages about two years ago. Amgen claimed the Ortho Biotech Products LP subsidiary of J&J, of New Brunswick, N.J., breached a licensing deal entered a decade earlier. (See BioWorld Today, Oct. 22, 2002.)
Later this week, yet another shoe is expected to drop in a complicated skirmish that has featured an Imelda Marcos avalanche of footwear over the last seven years, since Amgen first sought an injunction in the U.S. preventing TKT and Aventis (formerly Hoechst Marion Roussel) from making, importing, using or selling EPO. A decision is due Thursday on a similar EPO case from the House of Lords in London. (See BioWorld Today, April 17, 1997.)
But whatever happens overseas probably is moot, Chao said, since Amgen's EPO patents expire in the UK next year, and TKT is eyeing a Dynepo launch there in 2005 or 2006.
"Amgen's legal tango over there was really a strategy to slow down TKT to the extent they could," she said.