By Debbie Strickland

Baxter Healthcare Corp. won an unequivocally favorable patent-infringement ruling in a federal court late last week, but an FDA advisory panel's discussion of the marketing application for the technology in question reached murkier conclusions.

Judge Roderick McKelvie has ordered Bothell, Wash.-based CellPro Inc. to pay $7 million in damages -- three times a March jury award -- to three parties: Baxter Healthcare, the chief U.S. operating subsidiary of Deerfield, Ill.-based Baxter International Inc.; Johns Hopkins University, of Baltimore; and Becton Dickinson & Co., of Franklin Lakes, N.J.

"The award is the maximum allowable under 35 U.S.C. section 284 and is an appropriate amount to punish CellPro for its deliberate and bad faith infringement," wrote the judge, who also issued a delayed injunction against Ceprate sales.

The judge ruled CellPro infringed patents related to the cell separation technology used in the company's FDA-approved Ceprate SC Stem Cell Concentration System, a device that restores bone marrow destroyed by cancer chemotherapy.

CellPro Will Appeal

CellPro is appealing the case, and will appeal the injunction order on an expedited basis, said spokeswoman Joann Reiter.

The company has also filed a licensing petition under the Bayh-Dole Act, which in 1980 granted universities the right to patent discoveries from federally funded research and to license those inventions to private companies for commercial development.

The act authorizes the secretary of health and human services to "march in" and issue licenses to technology developed with federal funds. The Johns Hopkins patents fall under the act.

The National Institutes of Health will decide by Aug. 2 whether to begin formal proceedings, said Reiter. If the agency proceeds, it will follow a fact-finding procedure and then make a determination on granting a license.

The Baxter-CellPro case centers on two patents covering CD34 monoclonal antibodies and stem cell selection technology developed at Johns Hopkins and licensed to Becton and Baxter.

Judge McKelvie has issued a delayed injunction against sales of the Ceprate system, which by early July had been installed in 59 of about 250 transplant centers in the U.S.

CellPro may continue selling Ceprate until the FDA approves "an alternative system," i.e., Baxter's Isolex 200 Magnetic Cell Separator System, which went before the FDA's Biological Response Modifiers Advisory Committee Thursday.

FDA Panel Split On Baxter Device

The committee voted 13-2, with one abstention, that use of the Isolex system does not substantially impair engraftment and yields a cell population effective for transplantation and engraftment. But only six committee members agreed that failure to impair engraftment should be considered evidence of efficacy. Five said it should not and five abstained.

"We're caught in an ambiguous area, a new area for the FDA," said Deborah Spak, spokeswoman for Baxter. "They're trying to figure out what their criteria are for hybrid products." Whether the cell separation methods should be treated like drugs or devices is the big question, she explained.

Until Isolex receives FDA approval, the judge's ruling allows CellPro to continue selling its system in the U.S. and pay a portion of profits to Hopkins and its licensees. The company also may complete all FDA-approved clinical trials under way when Isolex is approved. CellPro is not required to pay royalties for use in clinical trials in which the company provides products free or at cost.

The judge also ordered that Ceprate export sales be slashed to zero over the course of a one-year period, with sales cuts of 25 percent per quarter. Isolex is already approved in Europe, Argentina, Hong Kong, Israel and New Zealand.

McKelvie's 100-page ruling had harsh words for CellPro:

"Behind the science, medicine, and the potential for treating cancer patients are investors who have demonstrated that their primary motivation is not humanitarianism, nor even responsible capitalism.

"The record in this case demonstrates that CellPro's motivation, as expressed by the words, conduct, and testimony of its founders, is greed. They are prepared to stretch the boundaries of marketplace competition to maximize their returns.

"They will deliberately take what is not theirs, pad their files and financial disclosures with weak and misleading opinions of counsel, and litigate to delay and frustrate." *