Amgen Wins Epogen Patent Infringement Suit

A federal judge ruled Friday in favor of Amgen Inc., the world’s largest biotechnology company, in a closely watched patent dispute that’s expected to impact the entire biotech industry and the development of new genetically engineered drugs.

U.S. District Judge William Young in Boston found that Amgen, based in Thousand Oaks, proved that three of its patents covering its blockbuster anti-anemia drug Epogen were “valid, enforceable and infringed” by Transkaryotic Therapies Inc. of Cambridge, Mass., and its partner, European pharmaceutical giant Aventis, which want to sell their own version of the drug.

Though it’s likely to be appealed, the decision was a huge victory for Amgen. Epogen--the company’s brand name for the drug erythropoietin, which treats anemia in patients with kidney failure by stimulating red-blood cell production--accounts for nearly half of the company’s $4 billion in annual sales.

“The most positive aspect of the ruling for Amgen is that it won on multiple claims” instead of on just one patent, said Andrew Milne, an analyst with the brokerage Dain Rauscher Wessels in Minneapolis. “That’s extremely positive for Amgen because . . . three patents must be appealed and not just one.”

But the case also raised the fundamental question of how broad a market a company could claim based on its genetic discoveries. Amgen had argued that if Transkaryotic won, it could use the same technology to copy virtually any biotech drug.

“This is good news for the sector,” said Alidad Mireskandari, manager of the Monument Medical Sciences Fund, which owns Amgen shares. “Had it gone the other way, we would have seen patent challenges become a bigger corporate strategy.”

But Transkaryotic claimed, among other things, that Amgen’s patents were overly broad. And others suggested that an Amgen victory could thwart smaller companies from entering or expanding in the biotech arena, thus crimping competition.

Not so, Milne said. With established patents such as those covering Epogen protected, smaller firms will be more encouraged “to come up with brand new drugs” instead of copying existing ones, he said. “This spurs more innovation for new drugs.”

Transkaryotic spokeswoman Justine Koenigsberg declined to comment pending the company’s review of Young’s decision. But some patent lawyers said it’s almost certain to be appealed.

“We are pleased with today’s ruling because it upholds our breakthrough inventions which made erythropoietin available to the millions of patients around the world who rely on this important therapy,” Amgen Chairman Kevin Sharer said in a statement.

The ruling came after financial markets’ regular hours, and Amgen’s stock--which had closed at $60 a share, down $2.06, during regular trading--shot as high as $72.75 in after-hours trading. Transkaryotic’s shares, which fell $1, to $34 a share, during normal Nasdaq trading, were halted just after the market’s 4 p.m. EST close.

Amgen is awaiting U.S. Food and Drug Administration approval for an improved version of Epogen, and Friday’s ruling would ensure that Amgen will hold onto Epogen sales until it can bring the new drug to the market, analysts said.

Besides marketing Epogen itself, Amgen licenses the drug to Johnson & Johnson, which sells it in the U.S. market as Procrit for treating anemia caused by other problems than kidney damage.

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Bloomberg News was used in compiling this report.