By Charles Craig

Cell Genesys Inc. has dropped its three-year-old California lawsuit accusing GenPharm International Inc. of stealing trade secrets related to development of transgenic mice for production of human antibodies to treat diseases.

However, the legal fight between the two firms over intellectual property rights to the technology continues on other fronts.

GenPharm, of Palo Alto, Calif., has filed two patent infringement lawsuits in U.S. District Court in San Francisco against Cell Genesys, of Foster City, Calif. Another battle also could be brewing at the U.S. Patent and Trademark Office in Washington.

GenPharm officials said Cell Genesys' dismissal of the state court case two weeks before the trial was to start proves the allegations of trade secret theft were false.

Cell Genesys officials, however, told BioWorld Today the same intellectual property claims at issue in the state court case will be argued in the federal court patent infringement litigation. In addition, they noted, the trade secret lawsuit could be revived in California court.

In February 1994, Cell Genesys filed a lawsuit alleging a scientific consultant to the company gave GenPharm technology for creating transgenic mice to produce human monoclonal antibodies. (See BioWorld Today, Feb. 2, 1994, p. 1.)

GenPharm denied the allegations and accused Cell Genesys of filing the court suit in retaliation for losing the race to develop transgenic mice. (See BioWorld Today, Feb. 3, 1994, p.1.)

GenPharm CEO Jonathan MacQuitty said Thursday the Cell Genesys trade secret lawsuit forced his company to cancel plans for an initial public offering in 1994. He noted GenPharm remains privately held and he blamed uncertainty caused by the litigation for his firm's difficulty in negotiating partnerships and in raising funds.

With Cell Genesys' withdrawal of the state court case, GenPharm will accelerate development of monoclonal antibodies, he added.

MacQuitty said the company has several antibodies in preclinical studies and expects to begin clinical trials with one of them within 12 months.

Cell Genesys has formed a subsidiary company, Abgenix Inc., to conduct antibody development. Kathleen Glaub, Cell Genesys' chief financial officer, said clinical trials will begin this year with a monoclonal antibody against interleukin-8 for treatment of inflammatory disorders.

GenPharm's federal court lawsuits involve patents issued to the company in 1996 and in January 1997 for development of transgenic mice and their use to produce human antibodies. The first patent infringement action was filed in October 1996 against Cell Genesys and the second suit was filed last week. *