Genentech Settles Tanox Dispute
Biotechnology titans Genentech Inc. and Novartis Pharma agreed Thursday to pay $6.6 million to Tanox Inc. to settle a bitter legal dispute. In return, Tanox officially shelved a promising peanut allergy treatment in favor of a drug Genentech makes.
The agreement to develop Genentech’s approved asthma drug Xolair for peanut allergy treatment instead of Tanox’s more advanced compound TNX-901 had been widely expected because of the legal fight.
Still, the decision means it probably will take at least a year longer than hoped before a peanut allergy treatment is easily available, critics of the deal said.
That’s because it appears Genentech will have to complete two more rounds of human testing before it can apply to the Food and Drug Administration for market approval. Genentech plans to start human testing of Xolair for peanut allergies next month.
TNX-901, on the other hand, already had won raves from allergists and passed key human tests.
Federal regulators were impressed enough to accelerate the process to judge its fitness for widespread use.
Researchers were preparing last year to begin the last round of human testing of TNX-901 before applying for FDA approval when Tanox abruptly halted the drug’s development because of the legal fight with South San Francisco-based Genentech and Switzerland-based Novartis.
Legal agreements signed years ago stipulated that Tanox could develop a peanut allergy drug only with the concurrence of its two partners, but those partners wanted to develop Xolair instead of TNX-901.
The agreement announced Thursday calls for Genentech and Novartis to each pay $3.3 million, and says that all three companies will share in any future profits of Xolair.
Both drugs are genetically engineered proteins designed to block the same molecule, which plays a crucial role in setting off asthma and allergy attacks.
Fifty to 100 people die a year because of these allergies.
Genentech shares, spurred on by an unrelated approval of Avastin, a colon cancer drug, rose $7.02 to a 52-week high of $103.10 on the New York Stock Exchange.
Tanox’s shares fell 12 cents to $16.12 on Nasdaq. Novartis shares lost 70 cents to $44 on the NYSE.
