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Weizmann's Yeda Lawyers Beat The Company Of the Institute's Former Professor. An Interim Result
"In the wake of a judge's ruling that stripped ImClone Systems Inc. of key exclusive patent rights, the biotech's biggest rival wasted little time taking advantage of the situation. Meanwhile, new ImClone director Carl Icahn blasted management for the patent loss and for ImClone's "sorry record" in general, in what could lead to a full-blown power struggle.
At Wednesday's annual meeting of ImClone shareholders in New Jersey, longtime investor Icahn, who owns nearly 14 percent of the company, was elected a director. So were two of his allies, which brings his faction on the board to four out of a total of 12 directors.
When Icahn was invited last month to stand for a board seat, he made clear his displeasure with management, including interim CEO Joseph Fischer and chairman David Kies, an M&A partner at Sullivan & Cromwell LLP in New York. In a letter filed Wednesday with the Securities and Exchange Commission, Icahn reiterated his views in light of Kies' refusal to step down as chairman.
"Given what I consider the sorry record of the company under your watch, it is time for you to step aside and allow someone else to be elected," Icahn wrote to Kies. "If you fail to do so, you will have thrown down the gauntlet, and we will have to react accordingly."
Part of the record Icahn cited was the loss of exclusive patent rights behind ImClone's sole marketed product, the cancer fighter Erbitux.
After the market closed Tuesday, biotech giant Amgen Inc. of Thousand Oaks, Calif., said it had licensed the same technology to which New York-based ImClone lost its exclusive rights. Fees were not disclosed.
Amgen shares were up $1.53, or 2.2 percent, to $70.98 in midday trading. ImClone was down 16 cents or half a percent to $28.95.
Amgen struck the license deal with Yeda Research and Development Co. Ltd., the commercial arm of the Weizmann Institute of Science in Rehovot, Israel. Judge Naomi Reice Buchwald of the U.S. District Court in Manhattan ruled Tuesday that three Weizmann scientists were the legitimate owners of the patent. Yeda's outside attorney, Nicholas Groombridge of Weil, Gotshal & Manges LLC in New York, immediately said the institute would license the patent nonexclusively.
The license allows Amgen to commercialize without fear of patent infringement its developmental cancer drug Vectibix, which could reach the market by early next year. Under U.S. patent law, drug companies can pursue research and development freely without worry of infringement, but they can be sued for infringement once a product goes commercial.
Vectibix is considered the main competition to ImClone's Erbitux, which treats colorectal and head-and-neck cancers mainly in concert with traditional chemotherapy agents. Erbitux is ImClone's only marketed product and has produced $900 million in revenue for the company since its launch in 2003. Bristol-Myers Squibb Co. of New York holds marketing rights to Erbitux and records its revenues. Erbitux net sales nearly doubled to $172 million in the second quarter of 2006.
An Amgen spokeswoman refused to discuss terms or timelines of Tuesday's licensing deal. Wall Street analysts estimate Amgen will pay a royalty rate in the low single digits once Vectibix comes to market. In a research note, Ron Ellis of Prudential Equity Group LLC said cost-of-goods estimates wouldn't change because of the "relatively minor size" of the royalty, which he estimated at 2 percent to 3 percent of total sales.
The patent in question, known as 866 after the final three digits in its assigned code, covers the use of a specific monoclonal antibody in conjunction with traditional chemotherapy treatments. Erbitux is mostly used this way, and ImClone has enjoyed exclusive rights to the patent since Erbitux came to market in 2003. Until Buchwald ruled otherwise Tuesday, French drug giant Sanofi-Aventis SA was the patent holder.
ImClone officials said Tuesday they will appeal the judge's decision, seek to have the patent overturned and explore the possibility of licensing from Yeda, which actually could mean a lower fee than what ImClone was paying Sanofi-Aventis. "If it's not exclusive, it certainly could be less," said ImClone vice president for intellectual property Tom Gallagher."
Also see: US National Academy of Sciences Member Rehovot's Michael Sela Says Weizmann Scientists Have Bad Ethics. MyRehovot.info (5 August 2006) [FullText]
Source: Alex Lash. Icahn Blasts ImClone Management. The Deal (25 September 2006) [FullText]
At Wednesday's annual meeting of ImClone shareholders in New Jersey, longtime investor Icahn, who owns nearly 14 percent of the company, was elected a director. So were two of his allies, which brings his faction on the board to four out of a total of 12 directors.
When Icahn was invited last month to stand for a board seat, he made clear his displeasure with management, including interim CEO Joseph Fischer and chairman David Kies, an M&A partner at Sullivan & Cromwell LLP in New York. In a letter filed Wednesday with the Securities and Exchange Commission, Icahn reiterated his views in light of Kies' refusal to step down as chairman.
"Given what I consider the sorry record of the company under your watch, it is time for you to step aside and allow someone else to be elected," Icahn wrote to Kies. "If you fail to do so, you will have thrown down the gauntlet, and we will have to react accordingly."
Part of the record Icahn cited was the loss of exclusive patent rights behind ImClone's sole marketed product, the cancer fighter Erbitux.
After the market closed Tuesday, biotech giant Amgen Inc. of Thousand Oaks, Calif., said it had licensed the same technology to which New York-based ImClone lost its exclusive rights. Fees were not disclosed.
Amgen shares were up $1.53, or 2.2 percent, to $70.98 in midday trading. ImClone was down 16 cents or half a percent to $28.95.
Amgen struck the license deal with Yeda Research and Development Co. Ltd., the commercial arm of the Weizmann Institute of Science in Rehovot, Israel. Judge Naomi Reice Buchwald of the U.S. District Court in Manhattan ruled Tuesday that three Weizmann scientists were the legitimate owners of the patent. Yeda's outside attorney, Nicholas Groombridge of Weil, Gotshal & Manges LLC in New York, immediately said the institute would license the patent nonexclusively.
The license allows Amgen to commercialize without fear of patent infringement its developmental cancer drug Vectibix, which could reach the market by early next year. Under U.S. patent law, drug companies can pursue research and development freely without worry of infringement, but they can be sued for infringement once a product goes commercial.
Vectibix is considered the main competition to ImClone's Erbitux, which treats colorectal and head-and-neck cancers mainly in concert with traditional chemotherapy agents. Erbitux is ImClone's only marketed product and has produced $900 million in revenue for the company since its launch in 2003. Bristol-Myers Squibb Co. of New York holds marketing rights to Erbitux and records its revenues. Erbitux net sales nearly doubled to $172 million in the second quarter of 2006.
An Amgen spokeswoman refused to discuss terms or timelines of Tuesday's licensing deal. Wall Street analysts estimate Amgen will pay a royalty rate in the low single digits once Vectibix comes to market. In a research note, Ron Ellis of Prudential Equity Group LLC said cost-of-goods estimates wouldn't change because of the "relatively minor size" of the royalty, which he estimated at 2 percent to 3 percent of total sales.
The patent in question, known as 866 after the final three digits in its assigned code, covers the use of a specific monoclonal antibody in conjunction with traditional chemotherapy treatments. Erbitux is mostly used this way, and ImClone has enjoyed exclusive rights to the patent since Erbitux came to market in 2003. Until Buchwald ruled otherwise Tuesday, French drug giant Sanofi-Aventis SA was the patent holder.
ImClone officials said Tuesday they will appeal the judge's decision, seek to have the patent overturned and explore the possibility of licensing from Yeda, which actually could mean a lower fee than what ImClone was paying Sanofi-Aventis. "If it's not exclusive, it certainly could be less," said ImClone vice president for intellectual property Tom Gallagher."
Also see: US National Academy of Sciences Member Rehovot's Michael Sela Says Weizmann Scientists Have Bad Ethics. MyRehovot.info (5 August 2006) [FullText]
Source: Alex Lash. Icahn Blasts ImClone Management. The Deal (25 September 2006) [FullText]
Labels: Weizmann Institute
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