Genentech Inc. announced Wednesday that it has filed anotherlawsuit against Eli Lilly and Co., alleging infringement of arecombinant DNA process patent that issued just the day before.

The U.S. patent, No. 5,221,619, stems from a cooperative researchand development program on human insulin that Genentechsponsored at the City of Hope National Medical Center in Duarte,Calif., in 1986, and covers manufacture of mammalian polypeptidesin microbial culture.

A recombinant human growth hormone called Protropin was the firstproduct marketed by Genentech (NYSE:GNE) of South San Francisco,Calif., in 1985, and is still the company's largest-selling product,although it lost orphan drug status in October 1992.

Lilly's Humatrope, which differs by one methyl group, was approvedand launched in 1987 for use in long-term treatment of children whodo not secrete adequate amounts of the hormone needed for them toattain normal stature.

Lilly is losing its seven-year marketing exclusivity in this orphandrug designation in 1994, when other companies, including Bio-technology General Corp. (BTG) and Ares-Serono Group ofSwitzerland, could attempt to enter the U.S. market with their non-methylated versions of the hormone. In fact, Genentech has a non-methylated version, Nutropin, in Phase III trials.

"It's clearly an attempt to preempt entry into the market," said BTGspokeswoman Leah Berkovits. Genentech sued BTG of New York andNovo-Nordisk A/S of Denmark in March, alleging infringement ofother patents.

The litigation between Lilly and Genentech dates back to 1986, saidLilly spokeswoman Suzanne Simala at the company's Indianapolisheadquarters.

Laura Leber, Genentech's director of corporate communications, saidGenentech is seeking "substantial damages" and other unspecifiedrelief. While not saying that Genentech seeks to enjoin Lilly or obtainlicensing or other fees, she added, "We are in disagreement withtheir manufacture of the product."

She called the newly issued patent "another strong patent thatenhances the chances of success in our suit against Lilly."

Analyst Sven Borho of Mehta & Isaly said Protropin contributessignificantly to Genentech's revenues, with projected sales this yearof $220 million. However, he said he expects Genentech to face somecompetition on price by 1994. Genentech currently claims a 75percent share.

Protropin is as important to Genentech as Activase, Borho said, but inthe future, DNase will become the companyLs most important productbecause it could potentially be used to treat chronic bronchitis, aswell as cystic fibrosis.

His model has 1994 Protropin sales of $230 million and 1995 sales of$235 million.

On the other hand, pharmaceutical analyst Jeffrey Cross ofMontgomery Securities said the issue is not as vital to Lilly, eventhough he sees growth hormones as an "important area to whoeverwould have it."

The biggest potential is not in orphan drug indications but in thelarger application of wasting syndrome that results from bad burns,multiple trauma or AIDS, and in ways to potentially reverse suchphysical decay as osteoporosis, said Cynthia Robbins-Roth, editor ofBioVenture View.

Lilly had been Genentech's partner in developing human insulin,marketed as Humulin, and the companies had a history of disputingwhether through that association Lilly "stole trade secrets" on themanufacture of recombinant proteins, Robbins-Roth told BioWorld.

Genentech's stock was down $1.38 a share on Wednesday, closing at$41.63.

-- Nancy Garcia Associate Editor

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

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