Enzo Biochem Inc.'s stock fell 13 percent Monday following itsfederal district court loss in a battle with Calgene Inc. over patentsrelated to genetic engineering of plant cells with antisensetechnology.
The decision in U.S. District Court in Delaware also invalidatedEnzo's broad U.S. patent claims relating to all forms of geneticantisense technology, which is used to block gene expression ofspecific proteins. The Farmingdale, N.Y.-based company argued itspatent protection covered the application of antisense manipulation incells of plants, animals and humans.
Enzo's president and CEO, Elazar Rabbani, said in a letter toshareholders the company will appeal the ruling, which he describedas "wrong both on the facts and the law." He noted the EuropeanPatent Office upheld the same patents in a challenge in the U.K.
Rabbani also said Enzo's main programs, development of diagnosticsand drugs with the antisense technology, would not be slowed by thedecision.
The ruling was issued late Friday after the market closed. Enzo'sstock (AMEX:ENZ) ended trading Monday at $16.62, down $2.50.Calgene (NASDAQ:CGNE) was off 25 cents to $6.62.
The patent dispute between Enzo and Calgene dates to 1993 and wasfocused on application of antisense technology for regulating geneexpression in plants.
The technology involves introducing an antisense gene into plantcells to counter the function of a targeted gene. Calgene, of Davis,Calif., uses the process to prevent tomatoes from spoiling.
The antisense gene produces a reverse copy of the targeted gene'smessenger RNA, which carries the instructions for expression of aprotein. The antisense messenger RNA binds to its counterpart andblocks the instructions.
Enzo sued claiming its patents were infringed by Calgene's use ofgenetic engineering in development of the Flavr Savr tomatoes.Calgene sued to invalidate Enzo's broad patent claims. Both Enzoand Calgene were issued antisense technology patents, howeverCalgene's covered only plant applications.
U.S. District Judge Joseph Farnan ruled Enzo's patents were notinfringed by Calgene's patents, adding, "The Enzo patents are notenabled and therefore are invalid."
In his conclusions, the judge also said Calgene's patent for antisensemanipulation in plants is valid.
Calgene's spokeswoman, Carolyn Hayworth, said the companyalready has licensed its technology to two other firms. The courtdecision's main significance to Calgene, she said, is that itdemonstrates "we're the technology leader in agriculturalbiotechnology for antisense."
If Enzo had prevailed in the case, the company's patent protectionwould have covered any application of genetic antisense technology.
However, it would not have applied to antisense drug developmentcompanies, such as Isis Pharmaceuticals Inc., of Carlsbad, Calif., andHybridon Inc., of Worcester, Mass.
Isis and Hybridon create compounds that are pieces of syntheticantisense messenger RNA. Those compounds are injected into cellsto block a targeted gene's message.
Genetic antisense manipulation is gene therapy in which antisensemessenger RNA is expressed inside the cell. n
-- Charles Craig
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