Calgene Inc. has fired the first volley in a potential patentdispute with Enzo Biochem Inc. over antisense technology.

Calgene (NASDAQ:CGNE), the Davis, Calif., developer of FlavrSavr tomatoes, filed suit Friday in U.S. District Court toinvalidate Enzo's pending U.S. antisense patent and obtaindamages.

Calgene maintains it has been hurt by "statements which Enzorepresentatives have made to the public regarding the breadthof its patent and the revenues that it would realize fromCalgene as a licensee under the patent," said Roger Salquist,chairman and chief executive officer.

"I'm tired of being shot at by snipers and decided it was timeto roll out the heavy artillery and clear the road," he toldBioWorld.

Jim McCamant, publisher of the Medical Technology StockLetter, said, "They were likely to end up in court later. I'vealways heard it's better to choose the venue and issuesyourself."

Antisense technology is the use of a reverse sequence of aspecific gene to repress the expression of that gene.

Enzo (ASE:ENZ) of New York exclusively licenses pendingantisense patent applications from the State University of NewYork (SUNY). Enzo spokesman Steven Anreder said he could notcomment on the suit because he had not seen a copy.

However, he said, "Genetic antisense technology represents anew frontier in the area of controlling the activity of any genein any organism, with applications in human therapeutics,veterinary, agriculture and bioprocessing. These pioneer patentand patent applications position Enzo Biochem to capitalize onthese opportunities, both in our own proprietary products andas a licenser to others."

McCamant cautioned that "Enzo's made a whole bunch ofdifferent statements about what this patent will mean to them.They have a history of not having all their statements pan out."

Anreder said he could not predict whether Enzo will seek tolicense its technology to Calgene.

Salquist, however, said he sees no infringement. "We could notsit patiently any longer allowing Enzo to continue to threatenCalgene with their patent position when Calgene does notconsider the Enzo patent to be valid. And we certainly don'tplan to alter our commercialization plan for our Flavr Savrtomatoes based upon Enzo's patent."

Calgene received a U.S. patent covering the use of antisensetechnology in any plant gene in any plant species last April.Filed in 1988, the patent was granted after the patentexaminer considered the work done at SUNY in bacterial cellsand the broad claims of the European counterpart of the EnzoU.S. patent. Enzo filed its U. S. patent application in 1983.

Bruce Brewster, director of research for Wolff InvestmentGroup in New York, follows Enzo and said Friday that thecompany has apparently not made progress in trying to licenseantisense technology within the industry or to Calgene.

"Calgene is pressing this issue in the way they feel is best,"Brewster said. "Who's in the right, I have no idea."

Enzo closed the quarter with approximately $5.5 millionearnings and $5.1 million expenses, leaving a "trivial" cashreserve, Brewster continued. "Enzo have had a troubledfinancial history, but have seemed to raise some money to helpthem through their development period. The prognosis isthey'll survive."

Calgene won't change its marketing plans with respect to theFlavr Savr tomato, which is expected to be introduced later thisyear, Salquist said. The litigation will probably take severalyears to resolve, he added.

Calgene completed a fifth round of public financing on Jan. 26,selling 2 million shares at $14.75 a share, resulting in 24million shares outstanding on a fully diluted basis.

"It's amazing how well the stock has held up with the badpress," said George Dahlman, who follows Calgene at Piper,Jaffrey & Hopwood in Minnesota. "This is a little like the firstpitch in a nine-inning game, and it's hard to comment on howit's going to come out."

Calgene's stock closed Friday at $14 a share, down 25 cents.Enzo closed at $6.50 a share, off 88 cents.

-- Nancy Garcia Associate Editor

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