High Court Decision Lets Amgen Keep Drug Patent : Pharmaceuticals: The refusal to hear an appeal ends a four-year legal fight over biotechnology between the firm and rival Genetics Institute.
The U. S. Supreme Court on Monday refused to hear a patent appeal case involving biotechnology’s best-selling drug, thus securing Amgen Inc.’s near monopoly on the drug. It closed a four-year legal battle between Amgen and rival Genetics Institute Inc. over the rights to the anti-anemia drug erythropoietin (EPO).
“The company is very pleased the Supreme Court has reaffirmed our position,” said Art Staubitz, Amgen’s senior vice president and general counsel. “The message to the biotechnology industry is its technology will be protected.”
Amgen, based in Thousand Oaks, saw its stock close Monday at $54.875, up $2. The stock of Genetics Institute, based in Cambridge, Mass., declined $1.375 to close at $38.125 per share.
EPO is a biotechnology-made copy of a human protein that circulates in the bloodstream and triggers production of red blood cells. Patients suffering from kidney disease can’t produce enough of the oxygen-carrying red blood cells and are chronically anemic and often bedridden. Since Amgen’s drug was approved for sale in June, 1989, EPO has proved to be a remarkable tonic for restoring patients’ lost energy.
Sold under its brand name, Epogen, Amgen’s drug is selling at the rate of about $400 million a year. In the United States, Amgen has a monopoly on the biggest EPO market--treating kidney dialysis patients. Under a marketing agreement, a unit of Johnson & Johnson sells Amgen’s drug in the United States for other uses, such as treating anemia caused by chemotherapy.
Amgen’s EPO success secured its position as the most dominant biotechnology company and, in February, Amgen began selling its second drug, which produces white blood cells and combats a wide variety of infections. Since the start of this year, Amgen’s stock has nearly tripled in price.
The legal dispute over EPO began in 1987 when Amgen and Genetics Institute were both granted different patents.
EPO was uncovered by scientists in 1906, but until biotechnology, it was impossible to produce enough of the protein to use as a drug. However, in 1983, Amgen scientist Fu-Kuen Lin isolated the gene that produces EPO and by splicing that gene with hamster cells, Amgen was able to manufacture EPO in the laboratory. Amgen’s patent covered the host cell that begins the EPO biotechnology process.
Genetics Institute’s patent covered a different route and involved a purified form of EPO separated from urine, even though not enough of the drug could be produced for commercial use by using this method. Still, in court, Genetics Institute argued that its patent covered Amgen’s biotechnological version of EPO.
Later, Genetics Institute figured out how to manufacture the drug using biotechnology and licensed it to a U. S. joint venture between Upjohn Co. and Japan’s Chugai Pharmaceutical.
In December, 1989, a federal judge in Boston ruled that both the Amgen and Genetics Institute patents were valid. Amgen appealed and in March a federal appeals court in Washington upheld Amgen’s EPO patent and invalidated the one held by Genetics Institute.
Genetics Institute made one last legal attempt and retained well-known constitutional law professor Laurence Tribe to submit its case to the Supreme Court. However, the court rarely hears patent cases, and it rejected the appeal without comment.
Jim McCamant, editor of Medical Technology Stock Letter in Berkeley, said, “Amgen did the really innovative work and Genetics Institute was trying to become a player by betting on its nonsense patent.”
The damages portion of the EPO case has yet to be tried. Genetics Institute has set aside $11 million to cover its potential damages, but Staubitz said Amgen is seeking in excess of $60 million for alleged patent infringement.
