Regeneron Pharmaceuticals Inc. received a key patentinterference declaration Monday for the sequence to its ciliaryneurotrophic factor, which it is developing in competition withSynergen Inc. for treatment of amyotrophic lateral sclerosis, orLou Gehrig's disease.
Regeneron (NASDAQ:REGN) of Tarrytown, N.Y., filed a patentapplication on the human DNA sequence for CNTF one weekafter Synergen (NASDAQ:SYGN) of Boulder, Colo., whichreceived a patent on the sequence in May 1991.
With the recent clinical trial setback for its lead compound, IL-1RA, and subsequent changes in top management, analystsexpect Synergen to proceed carefully with its cash reservesrather than enter a long, costly battle over rights to thenaturally occurring CNTF.
CNTF is a nerve repair factor that appears to prolong survivalof motor neurons that are irreversibly damaged in ALS. Thisprogressive neurological disease affects 30,000 Americans, hasno treatment and is always fatal within five to seven years.
"We don't plan to pursue litigation unless we feel it's necessaryto enforce our rights," said Synergen spokesman Paul Laland.
Meanwhile, Frederic Price, vice president of finance andadministration and chief financial officer of Regeneron, said:"We've always maintained that we would prefer to settle in themarketplace than in the courtroom. ... But it takes two tosettle."
Laland said the interference was expected. Both sides willpresent evidence regarding the date the sequence wasidentified, and the U.S. Patent Office will determine whichcompany should hold the patent. Generally, U.S. patents areultimately awarded to the person who first made the invention.
Regeneron's stock dropped below $8 a share last summerfollowing news that Synergen received a second patent onCNTF, but has nearly doubled since, Price said. The stock closedat $15 a share on Monday, up 13 cents. Synergen has a patenton the DNA sequence and production of CNTF in E. coli, as wellas purification from natural sources.
Regeneron has received notices of allowance on CNTFproduction in E. coli, as well as on the protein and its use. Thesepatent applications were forwarded to the interference branchof the PTO for review.
Analyst Franklin Berger of Josephthal, Lyon & Ross said thedeclaration "removes one cloud people had over Regeneron"and "creates a level playing field." He added that the companyhas clearly put a massive amount of effort into its lead productand is ahead of the race.
Regeneron and Synergen are both eligible to receive orphandrug status for CNTF in ALS, but the seven years of marketexclusivity and tax benefits will go to the company whose drugreceives FDA approval first.
Regeneron started a pivotal Phase III trial in March in morethan 700 patients at 36 sites. Berger projected that the nine-month trial may be substantially completed by the secondquarter of 1994, and said that if a product license application(PLA) is approved, Regeneron will earn its first revenues in1996, which he forecasts as a break-even year.
Analyst Lawrence Bloom of Dillon Read agreed that Regeneronis closer to applying for FDA approval. He added thatRegeneron has developed an independently tested scoringsystem to evaluate muscle strength in ALS patients. Thissystem, confirmed by five groups outside the company, will bepart of the Phase III trial and is scheduled for presentationThursday at a New York meeting of the American Academy ofNeurology.
Synergen plans to begin treatment this summer in a pivotalPhase II/III study in 24 centers with more than 500 ALSpatients, Laland said. In "pivotal" trials, results that passagreed-upon criteria can be submitted for FDA approval, hesaid.
Synergen is developing CNTF with Syntex USA Inc. in a jointventure that was formed in 1990 to develop protein-basedtherapeutics to treat neurological diseases. CNTF is the firstfactor from the joint venture to enter the clinic.
Synergen's stock closed unchanged on Monday at $9.63 a share.
-- Nancy Garcia Associate Editor
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