NeoRx Corp. said Wednesday that it has filed suit in U.S.District Court in Seattle against Immunomedics Inc., allegingpatent infringement and breach of contract.

Seattle-based NeoRx charged that Immunomedics' ImmuRaid-CEA colon cancer imaging product infringes NeoRx's patent No.4,877,868 for direct labeling technology.

Immunomedics said its company counsel has said that NeoRxhas no basis for an infringement claim. The company appliedfor marketing approval of ImmuRaid in April.

Immunomedics uses its proprietary technology for directlabeling, said Amy Factor, Immunomedics' vice president offinance. "We have a simple, one-step method of attachingtechnetium. NeoRx uses a multistep procedure," she said.Immunomedics of Warren, N.J., has filed for a patent on itstechnology.

NeoRx's breach of contract claim is based on a 1988 licensINGagreement under which Immunomedics granted NeoRx anonexclusive license to use Immunomedics' patent No.4,331,647 for NeoRx's melanoma antibody-based imagingproduct.

In March, the two companies began discussing licensing thetechnology to include NeoRx's imaging products for small celland non-small cell lung cancers.

NeoRx had already applied for marketing approval of the smallcell product in December 1989. The non-small cell product isin Phase III trials.

According to NeoRx, the 1988 agreement gives it the right tolicense other imaging products at a royalty rate no greaterthan that for the melanoma product, plus an initial fee.

"Immunomedics was throwing in additional considerationrequests outside the 1988 agreements," said Robert Littauer,NeoRx's chief financial officer. "We felt we couldn't reachagreement by friendly negotiations, and we filed suit onMonday."

According to Immunomedics' Factor, the original agreementsaid terms of subsequent agreements are subject toImmunomedics' consent. "They gave us a proposal and we had tosee if it met our requirements," she said. "While we wereevaluating it, they said they no longer wanted to discuss it andfiled a complaint."

Stocks of both companies rose Wednesday, with NeoRx(NASDAQ:NERX) gaining 13 cents to close at $1.50 andImmunomedics (NASDAQ:IMMU) closing at $7, up 25 cents.Immunomedics has filed for a public offering of 2.5 millionshares of stock.

-- Karen Bernstein BioWorld Staff

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