War Over Drug Patent Continues : Courts: Amgen and Genetics Institute will proceed to oral arguments in a case that will decide who can sell a new anemia medication.

By JOHN MEDEARIS

Aug. 28, 1990 12 AM PT

TIMES STAFF WRITER

Amgen, the Thousand Oaks biotechnology company, next week is to begin the latest step in its lengthy court battle against rival Genetics Institute in a case involving the rights to sell a valuable new anti-anemia drug.

The drug is erythropoietin (EPO), a biotech version of a human protein that alleviates chronic anemia in patients suffering from ailments including kidney disease.

The Court of Appeals for the Federal Circuit in Washington will hear oral arguments by the companies on Friday, Sept. 7, in a patent dispute between the two companies.

So far, Amgen is the only company licensed to sell a version of the drug EPO, marketed under the name Epogen. Thanks to booming sales of Epogen, Amgen had a profit of $11 million on revenue of $72 million in the quarter that ended June 30.

But both companies have patents on EPO. Amgen and Genetics Institute have each tried to invalidate the other company’s patent in a scramble for the drug’s market.

Genetics Institute’s licensee, Chugai Pharmaceuticals, Inc., is seeking Food and Drug Administration approval to sell the drug in this country.

The appeals court could uphold lower court orders calling on the companies to “cross license” each other’s versions of the drug--thus enabling each to freely sell the drug--and split the market. But Peter Drake, a biotech analyst for Vector Securities in Chicago, said Amgen could probably find legal strategies to put off such an outcome.

Drake said that every day that Genetics Institute and Chugai can’t sell their drug it “further strengthens Epogen’s hold on the market in the U.S.” Since it started selling the drug in June, 1989, Amgen has sold $215 million worth of Epogen.

Meanwhile, investors don’t seem to think the ongoing legal battle will hurt Amgen. While the broader stock market has plunged recently, Amgen’s stock has remained steady, closing at $45.88 on Monday, down slightly from its all-time high of $46.

Drake said that is because investors--particularly institutions that own 41% of Amgen--have been impressed with the company’s surging profits and believe that the trend will continue for at least a year.