Immunex Corp. stock rose 10 percent on Wednesday on newsthat the Patent and Trademark Office might not issue a patenton granulocyte macrophage colony stimulating factor.
If no patent issues, rival Genetics Institute Inc. will not beable to block Immunex from the market for the white bloodcell stimulator, as some analysts had feared. The companies'patent applications have been in an interference proceeding atthe PTO since 1990.
In a Securities and Exchange Commission filing related to itsproposed merger with American Home Products Corp., GI saidthe patent examiner "issued an order to show cause as to whythe interference ... should not be dissolved, because the subjectmatter is unpatentable as to all parties."
The statement prompted Merrill Lynch analyst Stuart Weisbrodto reiterate a "buy" on Immunex. Before this, he said, Immunexrisked being blocked from the market by GI's dominant patentposition.
Weisbrod said discussions he had with patent attorneysindicated that a likely outcome now would be for the two sidesto cross-license or for a combined patent to be issued to bothImmunex and GI's assignee, Sandoz Corp.
"We would interpret this as positive for Immunex because itmeans we're not blocked from the market and wouldn't have topay a license," said Immunex spokesman Jason Rubin. "But thisis only a preliminary ruling by the patent officer in aproceeding that is far from over."
Immunex stock (NASDAQ:IMNX) closed at $51, up $4.75. GI,whose stock (NASDAQ:GENI) closed unchanged at$38.50,remained confident that it will receive a patent.
"Immunex made an argument before the interference examiner,who isn't a biotech expert, that the subject matter isn'tpatentable due to various pieces of prior art," said Bruce Eisen,GI's patent counsel. "The interference examiner agreed andissued an order to show cause of why it should be patented."
The final arbiter is the Court of Appeals for the FederalCircuit, Eisen said. "The CAFC is very inclined to findunobviousness on cloning inventions," he said.
Sandoz received a European patent on GM-CSF earlier thismonth, which Eisen said bodes well for its U.S. chancesbecause the Europeans are much tougher on obviousness.
"The courts have ruled in the EPO (erythropoietin) case thatyou can't conceive of a cloning invention until you've done it,"said Cowen & Co. analyst David Stone. "And GENI was clearlyfirst with a human clone." Stone, who worked at GI as theadministrator for the GM-CSF project in the 1980s, continuesto believe that GI will receive the dominant patent.
"The fact that Immunex is dancing with glee that their majorproduct could go generic acknowledges that they've beendealing from a position of weakness," Stone said.
-- Karen Bernstein BioWorld Staff
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