Cygnus Therapeutic Systems announced Thursday it has settledthe final claim remaining from a patent infringement suitbrought by Elan Transdermal Ltd. and Elan Corp. plc of Irelandconcerning the manufacture and sale of nicotine patches byCygnus.

The Redwood City, Calif., company (NASDAQ:CYGN) received asummary judgment in its favor last spring on two of the threeclaims in the original suit regarding manufacture and clinicaltesting, and was set to go to trial in June on the third claimconcerning commercial use, Greg Lawless, chief executiveofficer, told BioWorld.

He added that Cygnus' marketing partners, Warner-LambertCo. and Kabi Pharmacia AB, participated in the settlement,although they were not defendants in the lawsuit, so Cygnushad not borne most of the legal expenses.

This final resolution brought "no material adverse financialimpact" to Cygnus, he added.

Cygnus' Nicotrol entered the market later than competingproducts and is about third or fourth in market share, analystDavid Steinberg of Volpe, Welty & Co. said.

But the market seems to be stabilizing and the company hasother products under development, so he believes it canovercome short-term "positioning risks." Steinberg rates thestock a "hold."

Cygnus has a seven-day estradiol patch for menopausalsymptoms in advanced clinical trials and a fentanyl patch forpostoperative pain management in Phase III testing. In earlydevelopment are eight female hormone replacement patches,two prototype products for oral hygiene and transdermalsystems for treatment of angina, anxiety, benign prostatichyertrophy and chemotherapy-related nausea.

However, Steinberg said, the estradiol patch is trailing acompeting product by Noven Pharmaceuticals of Miami by 12to 18 months, and Alza Corp. of Palo Alto, Calif., has atransdermal delivery patent for fentanyl that he thinks mightcreate legal uncertainties for the 24-hour version by Cygnus.

Elan previously settled cases it filed against Alza Corp. andMarion Merrell Dow Inc. with no financial impact to thecompanies. -- Nancy Garcia

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

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