Somatix Therapy Corp.'s recent European victory in achallenge to its ex vivo gene therapy patent for epithelialcells apparently is the first test of a broad proprietaryposition in the field. It may temper the sweeping claimsmade in a U.S. patent issued to the National Institutes ofHealth (NIH) and licensed to Genetic Therapy Inc.

Somatix Therapy, of Alameda, Calif., was granted aEuropean patent in 1991 for its ex vivo gene therapy inepithelial cells, which cover internal and external surfacesof organs and are targets for cancer treatments. Thecompany was issued the same patent in the U.S. in 1989.

Mark Bagnall, Somatix's chief financial officer, said thatas far as he knows the decision by the European PatentOffice Opposition Division is the first affirmation inEurope or the U.S. of a broad claim for ex vivo genetherapy technology.

"Every organ is epithelial based and many of the tissuesthat secret hormones are epithelial based," said Bagnall,explaining the potential scope of the patent.

Germany-based Boehringer Ingleheim GmbH, inchallenging the patent, sought to have its claimsinvalidated. When a patent is issued in Europe, opponentshave nine months to contest it. Boehringer Ingleheimmoved to disqualify Somatix's claims shortly after thepatent was issued four years ago.

Bagnall said Somatix's victory serves to strengthen itsposition in the U.S. as well as Europe.

"We see it as a building block," he said. "It gives us thefreedom to operate." Plus, he noted, a strong patent givesSomatix more leverage in negotiating corporate deals.

Boehringer Ingleheim's challenge also may portendstruggles in the U.S. for control of ex vivo gene therapy.

In March, the U.S. Patent and Trademark Office issued apatent to the NIH ostensibly covering ex vivo genetherapy in any type of cell. The technology was developedunder a 1988 cooperative research and developmentagreement between the NIH and Genetic Therapy Inc., ofGaithersburg, Md., which has the exclusive license on thepatent.

In the U.S., if a challenge is not raised prior to a patent'sissuance, the battle typically ends up in the courts.

Bagnall said Somatix has no "specific plans with respectto Genetic Therapy." However, he added, "It's fair to saywe have a high degree of confidence in our current patentposition."

Tyler Dylan, a patent attorney with Morrison and Foersterin Palo Alto, Calif., said many people are waiting to seehow the Genetic Therapy patent is handled. Switzerland-based Sandoz Ltd., which earlier this month moved toacquire Genetic Therapy for $295 million, adds anotherplayer to the mix.

If Sandoz and Genetic Therapy were to offer licenses onthe patent for small royalties it may never be challenged.A similar situation occurred when Stanford Universityand University of California decided to license rights tocompanies to the broad genetic engineering patentsawarded professors Stanley Cohen and Herbert Boyer in1981.

Dylan said the European decision in the Somatix patenthas no direct effect on the U.S. patent situation. However,he suggested, that because Somatix's patent is morenarrowly drawn than Genetic Therapy's, the former mayhave an easier time defending it in the U.S.

Marc Ostro, an analyst with UBS Securities in New York,described the battle over ex vivo gene therapy as "atempest in a tea pot."

In 10 years, he speculated, the dominant technology willbe in vivo gene therapy; that is, delivery of genes to cellswithin the body rather than ex vivo, which involvesremoving the cells, genetically altering them andreinfusing the cells.

Bagnall said the commercial launch of a gene therapydrug is at least two years away and he said both ex vivoand in vivo gene therapy will have a place in the field.

"An example of ex vivo that makes sense is for cancer,"he said, suggesting that oncologists likely will not bewilling to let tumors remain in a patient's body whilewaiting for the drugs to work. Instead, surgeons willcontinue excising tumors, whose cells then can be alteredand returned to the patient as a vaccine.

Somatix, Bagnall said, is doing just that with its GVAXcancer vaccine, which is being tested in three Phase I/IItrials for malignant melanoma and kidney cancer. Inaddition to its ex vivo gene therapy patent for epithelialcells, Somatix recently was granted a European patent forgenetic modification of tumor cells. n

-- Charles Craig

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