West Coast Editor
Friday's quick, unanimous verdict favoring Genentech Inc. in the patent case filed by Chiron Corp. concerning the former's breast cancer drug Herceptin (trastuzumab) doesn't mean the case is closed. Hardly.
"Certainly it's not over," said John Gallagher, media relations manager for Emeryville, Calif.-based Chiron, which issued a formal statement saying the company "continues to believe that its patent covering the anti-HER-2 monoclonal antibodies is valid."
The company's statement went on to claim that evidence in the trial "clearly showed that Chiron was the first to invent these antibodies. Chiron intends to pursue multiple courses of action to overturn the verdict, including an appeal should that be necessary."
Jurors deliberated one and a half days and ruled that Genentech, of South San Francisco, need not pay royalties on sales of the drug, which is expected to pull in more than $350 million for Genentech this year.
"We have a motion pending before the judge to have the verdict set aside, and the case isn't over until all the motions are considered," Gallagher told BioWorld Today.
Chiron filed the action two years ago, claiming up to $300 million in royalties was due to Chiron on more than $1 billion in Herceptin sales since its launch in 1998. Herceptin sold $346.6 million last year. (See BioWorld Today, June 9, 2000.)
A patent awarded to Chiron in June 2000 covers monoclonal antibodies that bind selectively to human breast cancer cells, specifically to the c-erbB-2 - or human epidermal growth factor receptor-2 (HER-2) - antigen. Herceptin is a monoclonal antibody for metastatic breast cancer that overexpresses the HER-2 protein.
That patent was the latest in a series of patents, the first of which was issued to Berkeley, Calif.-based Cetus Corp. in 1988. Chiron acquired Cetus in 1991, and the patents are based on an application originally filed in 1984. Chiron said its scientists are acknowledged to have pioneered development of the first anti-c-erbB-2 monoclonal antibody.
Neither stock reacted much to news of the verdict, with Genentech's shares (NYSE:DNA) closing Monday at $32, up 30 cents, and Chiron's (NASDAQ:CHIR) ending the day at $37.86, up $1.23.
Technically, the trial was not about patent infringement, noted analyst David Webber of First Albany Corp. in New York, since that issue was decided earlier.
"They had a situation in which the patent for Herceptin had already been ruled to infringe [on Chiron's], and Genentech had not been allowed to use some defenses in its arguments before the jury" because of that, he told BioWorld Today.
"In June, before the trial ever began, the judge issued a summary judgment that the patent was literally infringed, and this verdict [had to do with] whether the patent was valid," he said. "The patent was held invalid; if you're infringing an invalid patent, it doesn't matter. Now Chiron will attempt to have the invalidity verdict overturned."
The trial verdict is the first episode in what's likely to be a long-running show. Analysts earlier had predicted a Genentech win that would be followed by an appeal by Chiron, which might not be heard until 2004. The U.S. Patent and Trademark Office also has an interference proceeding under way and Chiron has another lawsuit related to Herceptin pending, Gallagher said.
"Chiron's second lawsuit is scheduled to go to trial next year," he said. "It involves a different patent but claims the same invention in a somewhat different way. The interference is a separate issue, and one that takes a fair amount of time to play out," he added.
The patent office declared the interference last month, saying it will examine the same patent that was at issue in the trial to find out if the patent was properly granted to Chiron in the first place, since the University of Pennsylvania first patented the Herceptin technology licensed by Genentech.
More influential for Genentech's immediate future is likely to be data from a Phase III trial of Genentech's monoclonal antibody Avastin (bevacizumab) in combination with chemotherapy against breast cancer, due shortly. The data are eagerly awaited, since it may make a regulatory filing possible without the company having to wait for later results from a Phase III trial with Avastin in colorectal cancer.
Michael King, analyst with Banc of America Securities in New York, said last week he doesn't expect the trial results to be "pristine," but "if they get an overwhelming benefit, they have to consider filing."