Genetics Institute Seeks to Bar Competitor’s Drug

Genetics Institute, a Cambridge, Mass., biotechnology company, and its Japanese partner have filed for a permanent injunction in U.S. District Court in Massachusetts that could ultimately prevent Amgen from selling its popular anti-anemia drug.

But the injunction, if granted, might not go into effect for months, so Genetics Institute asked that the order be stayed pending any appeals.

Amgen, based in Thousand Oaks, has been selling the drug since last June, while Genetics Institute and its partner, Chugai Pharmaceutical Co. of Japan, are expected to receive U.S. Food and Drug Administration approval to sell their version of the drug within the next couple of months.

It was the latest in a long series of legal disputes involving patents the two companies have on erythropoietin, or EPO, a biotechnology-engineered drug that has proved remarkably effective in eliminating anemia in patients with chronic kidney disease.

“I think it’s a tactical move to keep the pressure on Amgen,” said Jim McCamant, editor of Medical Technology Stock Letter in Berkeley.

Amgen’s stock took a beating Tuesday, closing at $47.25 a share in over-the-counter trading, down $4.50 on heavy volume of 844,200 shares traded. Genetic Institute’s stock closed at $29.75, down 25 cents.

Last month, a federal judge in Boston upheld both Amgen’s and Genetic Institute’s patents on EPO. As a result, it would enable Chugai to import EPO made in Japan for sale in the United States. But a court might still declare that Amgen is infringing Genetic Institute’s patent if it continued to make the drug in this country. The U.S. Patent Office is currently reviewing patent claims on the drug involving both companies.

If Amgen were not allowed to sell EPO in this country, it would effectively shut down the company because EPO is its only commercial product.

Amgen sold $49.4 million worth of the drug in its third quarter that ended Dec. 31, as it posted net income of $7.98 million.

“Amgen has no right to manufacture or sell its product in the U.S. without a license from us,” said Gabriel Schmergel, chief executive of Genetics Institute.

Amgen Chief Executive Gordon Binder said, “No judge would take (Amgen’s product) off the market now and make the patient suffer.” There are about 44,000 kidney dialysis patients in this country who are already using the drug.

Still unclear is what will happen when Genetics Institute-Chugai receives approval to sell their version of EPO.

McCamant said he expects Genetics Institute and Amgen to negotiate some sort of cross-licensing agreement that would enable both companies to sell their drugs in the United States.

Binder said Amgen had been negotiating with Genetics Institute about a cross-licensing deal.