Alpha 1 Biomedicals Inc. announced Friday that it has begunarbitration proceedings against SciClone Pharmaceuticals Inc.,its licensee for thymosin alpha 1.
SciClone is developing the product as Zadaxin, for treatingchronic hepatitis B infection.
SciClone (NASDAQ:SCLN) holds a license from Alpha 1 ofBethesda, Md., to commercialize the product worldwide exceptin the U.S., Canada, Europe, Israel and Korea.
Alpha 1 (NASDAQ:ALBM) claims that the arbitration is the onlyway to resolve a number of contractual disputes relating to thelicense agreement. "After months of discussion, the companiesremain at an impasse," said Vincent Simmon, chief executiveofficer of Alpha 1.
"These issues include whether the license agreement has beenamended to increase Alpha 1's sale price of thymosin alpha 1to SciClone for commercial resale and to change the formula forthe calculation of the royalty payment due Alpha 1, as well asthe question of whether SciClone can conduct developmentalactivities outside of its territory," the company said.
That centers around the U.S., according to Thomas Moore,SciClone's chairman and chief executive officer. "We feel ouragreement allows us to develop an oral formulation of theproduct in the U.S.; Alpha 1 wants us to do the formulation inMexico," Moore said.
The arbitration could take as long as four to six months toresolve, although neither company feels that the proceedingswill have any effects on business or continuing activities.
Separately, SciClone of Palo Alto, Calif., announced last weekthat the Italian company Sclavo SpA has agreed to packageclinical supplies of Zadaxin (thymosin alpha 1) and futurecommercial supplies for SciClone. Alpha 1 entered into arelationship with Sclavo in 1986, by which Alpha 1 has therights to manufacture thymosin in bulk, and Sclavo the rightsto market the drug in Italy.
"Alpha 1 manufactures the product bulk and sells it to SciClone,who then delivers it to Sclavo," explained Alpha 1's Simmon."Then Sclavo puts it into vials for SciClone and exports theproduct from Italy to SciClone's territory."
Meanwhile, Sclavo has sponsored clinical trials in Italy onthymosin alpha 1 for treating chronic hepatitis B and C. TheItalian government has approved the price for the product."Sclavo will have a free sale certificate from the Italiangovernment. That means that importing from Sclavo willbecome easier," said Simmon.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.