OncorMed Inc. today began offering its genetic testing service formutations in the BRCA2 gene to go along with its already availabletest for BRCA1.

Myriad Genetics Inc., already in beta testing for BRCA1, also isdeveloping a test for BRCA2. That should be available next year.

But it could take a number of years to determine if one of thecompanies, because of its intellectual property position, can excludethe other from offering the service. Or whether both can stake a claimin what is expected to become a lucrative market.

"At this time we have reason to believe the OncorMed technology iscovered by our patent application," said Bill Hockett, director ofcorporate communications for Salt Lake City-based Myriad.

Doug Dolginow, OncorMed's president and chief operating officer,pointed out that no patents have been issued. "Therefore theintellectual property issue is open to speculation as to what actionsthe patent office will take. The relative patent positions of the manyinvestigators who filed patents in this area are quite complex. It'sanybody's best guess how it's going to sort out in the end."

When the U.S. Patent and Trademark Office does sort out the matterit could set precedents for what is sure to be an evolving issue, asgenes are discovered, mutations identified and different approachestaken for using the information. The genes and their mutations areimplicated in many breast and ovarian cancers.

Myriad filed for a patent on the BRCA1 gene in 1994 and later onBRCA2. It likely will be a year _ and possibly much longer _ beforepatents are issued for the genes. Patents filed on mutations of thegenes are another story, and one that could take longer to play out.

OncorMed, of Gaithersburg, Md., has filed patents on mutations ofBRCA1, but none yet on BRCA2, Dolginow said. Whether mutationswill be patented independent of the gene is another matter for patentofficials to determine.

"It's absolutely clear who filed first on BRCA1 and BRCA2 [genes]_ that's Myriad," said Marc Ostro, a managing director at UBSSecurities in New York. "If and when the Myriad patents issue it maybe able to stop OncorMed from performing the service. It's verydifficult to predict when you have patents that haven't issued yet.

"If they are issued [to Myriad] there's always the possibility ofgetting an injunction and potentially shutting OncorMed down,"Ostro said. "The first key point to look at when the patent issues is,`Will Myriad be able to get an injunction prior to adjudication.'"

David Sobel, an analyst in Rodman & Renshaw Inc.'s Boston office,said there probably are hundreds of mutations that cause BRCA to bedefective. "They've been discovered by many groups all over theworld, including OncorMed and Myriad. The question is are thosediscoveries of mutations patentable? And then how would that all sortout in terms of who has intellectual rights for certain mutations?

"It's far from being straightforward in terms of knowing how thelegal system will deal with all this," Sobel said. "The patent issue stillis cloudy and won't be resolved for years. Will Myriad sublicense toOncorMed? In the meantime both companies will be offering theservice. In the end there probably will be some sort of cross-licensingagreement."

The idea, Sobel said, is to have as accurate a test as possible. A testnot incorporating all known disease-associated mutations would belacking.

"Eventually," Ostro said, "Myriad will prevail, patent or no patent."Even if Myriad doesn't exclude OncorMed from offering the serviceit will get most of the market, he said. "They have a vastly superiortest."

Myriad's strategy is to sequence the complete gene and then seekmutations. OncorMed is offering tests in stages, with those for themost common mutations done first and then moving on to additionaltechniques if necessary. Sobel said capacity to fill market demand is aconcern if the tests are adopted widely. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.