Glaxo Loses Bid for Damages From Genentech in Patent Case

GlaxoSmithKline on Friday lost a bid for nearly $200 million in damages from Genentech Inc., after a jury found that Glaxo’s patents on two cancer-fighting drugs were invalid.

The federal court jury in Delaware deliberated for 11 hours before finding Genentech’s Rituxan, used in the treatment of lymphoma, and Herceptin, used to treat breast cancer, didn’t trample on Glaxo’s patent rights. Glaxo researchers contend they patented the methods that South San Francisco-based Genentech used to produce the drugs.

In New York Stock Exchange trading, Genentech, which reported $1.64 billion in fiscal 2000 sales, rose $2.92 to close at $54; American depositary receipts of GlaxoSmithKline rose 92 cents to close at $53.61.

Executives of Middlesex, England-based Glaxo argued during the 12-day trial that they spent billions of dollars inventing the process for producing the cancer-fighting drugs. The No. 2 drug maker behind Pfizer Inc. also contended Genentech owed $196.5 million in royalties for selling drugs based on the company’s inventions. Rituxan and Herceptin have combined sales of $1.63 billion since being introduced in 1997 and 1998, respectively.

Glaxo “was putting a gun to Genentech’s head” in seeking royalties because the patents on the inventions “are clearly invalid,” Leora Ben-Ami, a lawyer for Genentech, the world’s oldest biotechnology company, told jurors in closing arguments.

Glaxo’s lawyers tried to convince jurors that Genentech researchers misappropriated Glaxo’s inventions and disregarded its rights.

“Our patents have been seriously disrespected by Genentech,” Stephen Judlowe, a Glaxo lawyer, told jurors during closing arguments.

He said the technology, used to make human cancer antibodies from genetically engineered Chinese hamster ovary cells, was invented by Glaxo.