By Lisa Seachrist

Washington Editor

WASHINGTON — Amgen Inc. and Transkaryotic Therapies Inc. have launched their opening salvos in what is likely to be a lengthy patent battle over Transkaryotic's gene-activated erythropoietin (GA-EPO), which is being developed with Hoechst Marion Roussel AG.

U.S. District Judge William G. Young ruled Amgen's patent infringement allegations were inconsistent with the safe harbor provisions in the Waxman-Hatch Act, which precludes patent litigation while drugs are being developed for FDA approval. The case, for the time being, has been administratively closed and may be reopened once Transkaryotic and Hoechst proceed beyond obtaining FDA approval for the drug.

Transkaryotic's stock (NASDAQ:TKTX) Thursday soared 27 percent, closing at $36 per share, up $7.75. Amgen's stock (NASDAQ:AMGN) was off $2.125 to $55.812.

"We had a complete victory," said Richard Selden, president and CEO of Cambridge, Mass.-based Transkaryotic. "We think Amgen filed this suit to disrupt our development and they failed. We believe now that Transkaryotic and Hoechst control the timing of this case."

David Kaye, spokesman for Amgen, in Thousand Oaks, Calif., claimed victory as well noting that while Transkaryotic has Waxman-Hatch Act protections, the case can be revived as soon as the company steps outside the limits of that protection.

"The merits of this case have yet to be decided," Kaye said. "This was only a preliminary hearing."

Amgen has marketed erythropoietin (EPO) in the U.S. for treatment of anemia associated with kidney dialysis since June 1989. Produced in hamster cells, the drug is a recombinant form of the naturally occurring human hormone. The company holds five patents that cover everything from the DNA and recombinant host cells to the EPO product itself and the process to make the drug.

Transkaryotic has developed a method to activate gene expression of erythropoietin in human cells as a means of creating GA-EPO. The company, in conjunction with Frankfurt, Germany-based Hoechst, will begin Phase III trials in the second half of this year.

Selden told BioWorld Today Transkaryotic's methods of producing EPO in no way infringe on any of the patents held by Amgen.

In his ruling, Young wrote, "This court recognizes the importance of Amgen's desire to have the infringement question settled authoritatively at the earliest stage."

However, the court discarded all of Amgen's arguments that the companies should be exempt from Waxman-Hatch protections and the patent case should go forward before GA-EPO enters Phase III trials.

Amgen had called into question Transkaryotic's and Hoechst's commercial scale production of GA-EPO, animal safety studies, export of GA-EPO to Japan to serve as reference material and characterization studies of GA-EPO.

Young called one of Amgen's arguments a "red herring." In addressing the shipment to Japan, Young wrote: "Amgen cannot defeat application of the statute merely by questioning the defendants' [Transkaryotic and Hoechst] sincerity, and thus has raised no genuine issue of material fact."

Young, who has presided over EPO litigation in the past, has retained jurisdiction of this case when the safe harbors no longer apply.

"We think since we are right in our positions, the more educated the audience the better we will fare," Selden said. "In this ruling, the judge found all of Amgen's arguments off point and wrong."

Eric Schmidt, an analyst with UBS Securities, wrote in his report on the court ruling that Transkaryotic was the clear winner in its first skirmish with Amgen and that he does not believe that Transkaryotic violates any of Amgen's patents. *