[lou_lou]

News

Jury Rules Company Infringed Drug Patent

Harvard wins suit against pharmaceutical giant for copying drug formulas
Published On 5/5/2006 4:17:00 AM

By NICHOLAS M. CIARELLI

Crimson Staff Writer


A federal jury yesterday sided with Harvard and three co-plaintiffs in their dispute with pharmaceutical giant Eli Lilly, finding that two of the firm’s drugs, Evista and Xigris, infringed on a 2002 patent—a ruling that could have implications for other drug makers in the industry.

Eli Lilly must pay the plaintiffs damages of $65.2 million, as well as additional royalties based on future sales of the two drugs until the patent expires in 2019, the jury ruled. Harvard will receive a portion of those royalties.

The drug company, however, argued that the patent is invalid because it covers a naturally-occurring biological process.

Spokesman Joe Wrinn wrote in an e-mail yesterday that the University is pleased with the jury’s findings. But the biggest winner yesterday was Ariad Pharmaceuticals, a small firm that was exclusively licensed the patent by Harvard, MIT, and the Whitehead Institute for Biomedical Research, the other plaintiffs in the case.

In the 1980s, scientists from those institutions discovered a method of treating diseases by regulating the activity of a molecule called NF-kB—a transcription factor involved in protein production.

When the discovery was eventually awarded a patent in 2002, Ariad and the three institutions sued Eli Lilly in the U.S. District Court for the District of Massachusetts.

Evista helps prevent and treat osteoperosis and Xigris treats people with severe sepsis.

Royalties from that patent could be a windfall for Cambridge-based Ariad, which took a net operating loss of $55 million in 2005. The company’s stock surged 26 percent on news of the verdict yesterday, closing at $6.99.

Eli Lilly blasted the ruling, saying that its drugs do not infringe on the patent. The firm also argued that the patent is invalid because it lays claim to a natural signalling process of a molecule in the body.

“The Ariad position is equivalent to discovering that gravity is the force that makes water run downhill and then demanding the owners of all the existing hydroelectric plants begin to pay patent royalties on their use of gravity,” the company’s senior vice president and general counsel, Robert A. Armitage, said in a statement. “We just don’t believe that the patent law could possibly move in such a direction.”

If the decision stands, it might open the door for holders of similar patents to target other drug makers with infringement claims. Signaling of the NF-kB molecule—the process at issue in Ariad’s dispute—is used by more than 200 compounds, including aspirin, according to Science magazine.

Perhaps anticipating a future lawsuit, biotech company Amgen last week filed a pre-emptive motion asking a Delaware court to find Ariad’s patent invalid. The Thousand Oaks, Calif.-based firm also sought a ruling that its drug products do not infringe on the patent.

Eli Lilly will contest the verdict by asking the judge to overturn the jury’s decision, the Indianapolis-based company announced yesterday. If its request is denied, the firm will appeal the ruling.

And Eli Lilly will challenge the enforceability and validity of the patent in another District Court bench trial, the drug company said.

“We are confident that we will prevail in the trial court and the verdict will be upheld by the appeals court, if Lilly files an appeal,” Ariad’s chairman and chief executive, Harvey J. Berger, said in a statement yesterday.

—Staff writer Nicholas M. Ciarelli can be reached at ciarelli@fas.harvard.edu.


http://www.thecrimson.com/article.aspx?ref=513352