EPO Rights Being Tested
In a few months, the legal battle that started over two and half years ago will reach a culmination in a Boston court, when it will be decided if TKT and its partner, Hoechst Marion Roussel, the large European pharmaceutical company, can sell an anemia drug that rivals Amgen's drug. So far, TKT and Hoechst have been allowed to test the drug, but the court has yet to decide whether the company may legally market it. Amgen claims the companies are violating its patents and should be stopped from marketing it, even if it gains U.S. Food and Drug Administration approval.
TKT uses a different methodology for making EPO, termed "gene activation", which doesn't involve the sometimes difficult and expensive gene cloning technology. Instead, genetic regulatory elements are inserted by homologous recombination at specific sites in chromosomes in proximity to a human gene responsible for the expression of a therapeutic protein. Subsequently, the gene-activated protein is produced in a homologous cell-based production system.
By contrast, Amgen makes Epogen starting with a more traditional biotechnology manufacturing process patented in 1983. The complete coding sequence of the EPO gene is inserted into Chinese hamster ovarie cells, which then create copies of the human EPO protein.
TKT's all-human-cell approach versus Amgen's reliance on splicing or transporting from one cell to another to create human EPO production is at the heart of the dispute—even though in 1996, Amgen modified some of its patents to account for different production methods. Amgen also is now testing a second-generation EPO product.
Analysts Disagree
"We think the technology is sufficiently different that TKT with Hoechst should prevail," said Jonas V. Alsenas, biotechnology analyst with ING Baring Furman Selz in New York. "TKT is starting with human cells and using production technologies a decade advanced over Amgen's."
But Meirav Chovav at Salomon Smith Barney maintains that TKT is clearly infringing on patents Amgen holds for its version of EPO, which is sold as Epogen.
SG Cowen & Co., a New York investment bank, predicts that the TKT/Hoechst version of EPO, now in final phase III clinical trials, could capture as much as 8% of Amgen's market in 2001 and 15% 2002 if the FDA clears it for sale. Cowen projects Amgen's Epogen sales at more than $1.9 billion in 2001.
View from the Top
For TKT's Selden, a former pediatrician and researcher, winning against Amgen could lead to the company's first product revenues under its financial arrangement with Hoechst.
Meanwhile, Amgen's CEO Gordon Binder maintains the forthcoming legal tussle was not unexpected. "When you're on top it's not surprising that others will want to go after you. To me this is Hoechst with TKT trying to get around our patents to get into the EPO market," said Binder. "This is just business—we've come to expect it and we don't think TKT's arguments have much merit. We'll see what the judge says."
Indeed, Amgen is in a simultaneous battle with Johnson & Johnson (New Brunswick, NJ). Under an Amgen license, Johnson & Johnson makes and sells EPO under the name Procrit, and expects this year to have $1 billion in revenue from the drug. But Amgen charges that Johnson & Johnson has gone beyond the terms of its license by selling it for treatment of patients on kidney dialysis. Amgen claims it holds exclusive rights to EPO for that purpose. The dispute is in arbitration.
Last week, Amgen asked U.S. District Court Judge William Young for summary judgment to dismiss the TKT case. His ruling on the motion is expected around Dec. 15.
"I think we'll go to trial—we're ready," said Selden, who nearly 11 years ago created TKT, but only focused on EPO since 1996.