Rights to Protein Design Labs Drugs Returned

Protein Design Labs Inc. said Germany’s Boehringer Mannheim had returned all rights to two Protein Design drugs. Shares in Mountain View-based Protein Design Labs fell $7.38 to close at $39.38 on Nasdaq. Protein Design’s announcement marked the end of an agreement between the companies granting Boehringer all development and marketing rights outside North America for two Protein Design Labs drugs. Boehringer has retained the rights to two other Protein Design Labs antibody compounds that it said it will continue to develop for potential use. “The market reaction is justified” because the news “draws into question” the value of the drugs to Protein Design, said David Molowa, an analyst with Bear Stearns & Co. “If it was a good product,” Boehringer “would have kept it,” he said. Boehringer ended development and ceded the rights to Protein Design’s human antibody drug for treating hepatitis B as well as its so-called Protovir candidate for treating a herpes-like cytomegalovirus, which afflicts patients with suppressed immune systems--such as AIDS patients and transplant recipients. Development trials for the hepatitis B drug were suspended after some patients developed undesirable side effects. Company officials for Protein Design said--and analysts agreed--that the end of the agreement for the two products wouldn’t affect its revenue in the near future.