Alza Corp. shares emerged unscathed on Friday, rising 13 centsto $79.50, following the company's announcement that it and itsmarketing partner Marion Merrell Dow Inc. are being sued forpatent infringement by Elan Corp. plc and American CyanamidCo.
The suit, filed last Wednesday in U.S. District Court in SanFrancisco, alleges that Alza (AMEX:AZA) and MMD are infringingU.S. patent No. 4,943,435.
The '435 patent, issued to Pharmetrix Corp. of Menlo Park, Calif.,contains claims for a transdermal patch containing sufficientnicotine to maintain a useful flux of nicotine for 12 hours ormore and claims for a method of controlling diffusion of nicotineat certain rates.
The court set a Dec. 2 hearing to act on a request for apreliminary injunction against Alza and MMD sought by Elan ofAthlone, Ireland, and its licensee, American Cyanamid ofWayne, N.J.
The court also ordered that the parties not comment publiclyand that no Nicoderm sales take place prior to the hearing. MMDhad said it would begin selling Nicoderm before the end of theyear after the Food and Drug Administration earlier this monthgranted marketing approval for Alza's patch.
Merrill Lynch analyst Stuart Weisbrod on Friday predicted thatthere is less than a 40 percent chance the injunction will begranted and said he expects Nicoderm sales to begin inDecember.
"We expect the case to go to court and take a substantialamount of time to be settled," Weisbrod wrote.
"I'm more curious than concerned," Alex. Brown & Sons Inc.analyst Adele Haley told BioWorld. "I don't think anybody'sgoing to lose any sleep until Dec. 2. My sense is it's a defensivestrategy on Elan's part. If their own product had workedglowingly, they wouldn't need to do this."
Elan Transdermal Ltd., a subsidiary of Elan, in May sued CygnusTherapeutic Systems Inc. of Redwood City, Calif., alleginginfringement of a different patent, No. 4,946,853. The '853patent relates to preparations containing nicotine and methodsof treating withdrawal symptoms associated with smokingcessation. That suit, also filed in San Francisco, is in thediscovery phase.
Cygnus has moved for summary judgment on the grounds thatit's not infringing, said Lynn Pasahow of McCutcheon, Doyle,Brown & Enerson, outside counsel for Cygnus. The motion isscheduled to be heard on Jan. 30, 1992.
Cygnus shares (NASDAQ:CYGN) closed down 75 cents at $20.50. -- Karen Bernstein
(c) 1997 American Health Consultants. All rights reserved.