Genentech and UC May Settle Growth Hormone Dispute
Genentech has reportedly agreed to pay the University of California at San Francisco (UCSF) $150 million and build a $50-million building on the school's new research campus in San Francisco's Mission Bay, the Times reported, citing sources close to the negotiations. The five scientists responsible for discovering the genetically engineered human growth hormone at UCSF would collect about $20 million each under the deal, and the university would get the rest of the settlement, the sources told the newspaper.
The proposed settlement comes more than five months after a San Francisco-based jury came up a vote shy of finding that Genentech violated UC's patent, though they did uphold the validity of the patent. A retrial was scheduled for January, but settlement talks have been ongoing for months.
While still subject to approval by UC's Board of Regents, the proposed settlement would allow Genentech to avoid a retrial on Protropin and a court battle over a second human growth hormone drug, Nutropin. Protropin and Nutropin are two of Genentech's top-selling products. The regents are seeking up to $2.8 billion in damages from the company.
"All I can say is we're still in discussions concerning settlement and no final settlement has been reached yet," said Genentech spokeswoman Laura Leber, who declined to comment on the settlement figure. UC's Board of Regents is expected to consider the offer at meetings Thursday and Friday at the University of California Los Angeles. The settlement figure was contained in a memo distributed to staff members on both sides of the case today, according to someone familiar with the matter.
Growth Hormone Harvest
Genentech, the oldest biotechnology company in the country, reported sales of growth hormone drugs including Protropin and Nutropin of $214 million of the company's 1998 revenue of $1.15 billion.
The UC system sued Genentech in 1990, five years after the company received U.S. Food and Drug Administration approval to sell Protropin in the U.S. The dispute dates back to 1978, when researchers at UCSF found the gene for human growth hormone, giving them the means to make it outside the body. In 1982, the university obtained a patent for the DNA used to make the hormone.
Before that discovery, human growth hormone had been extracted from cadavers. In addition to its use with smaller-than-normal children, it has also been used to treat cardiovascular, lung, and heart disease, and is being studied for possible use in treating arthritis and cystic fibrosis.
Midnight Hijinks
Peter Seeburg, a former Genentech scientist who joined the company from UCSF, testified that he and a colleague returned to the school's laboratory without permission on New Year's Eve 1978 and removed DNA used in research on growth hormones. The material ended up at Genentech.
Genentech admitted that genetic material was removed from the UCSF lab but claims it didn't play a role in its own development of commercially viable quantities of human growth hormone.
The company holds at least one patent on Protropin, as well as other patents on the DNA and plasmid used to make it. Genentech maintains it couldn't have gotten them unless its product was substantially different than the university's.