Subscribe

Recent Articles

Popular Posts

Site search

Follow Us

Archive for May, 2008

Bristol-Myers Squibb to Acquire Kosan Biosciences for $190 million

Written by on Saturday, May 31st, 2008

Bristol-Myers Squibb has agreed to acquire Hayward-based Kosan Biosciences for $190 million, reported the San Francisco Business Times.  Both boards of directors have approved the deal.

The deal will pay investors $5.50 per share, which amounts to a "huge premium" according to BioHealth Investor, which indicated that the stock was only at $1.65 on the day the deal was made, and that its 52-week trading range was $1.28 to $6.49.

BioHealth Investor reported on the acquisition as follows:

The acquisition of Kosan will enhance Bristol-Myers Squibb’s pipeline will get to enhance its pipeline with compounds in two important classes of anticancer agents, called novel Hsp90 (heat shock protein 90) inhibitors and epothilones.

The company believes this will result in new treatment options for patients as another important milestone in becoming a next-generation BioPharma leader.  Kosan evolved from a research platform to a development company and this should offer a timely opportunity to place its clinical programs in the hands of a much larger company to bring innovative cancer treatment options to patients.

According to the San Francisco Business Journal, a separate exclusive worldwide license agreement was signed simultaneously, which will remain in effect even if the acquisition does not go through.  The terms of that agreement are $25 million up front plus milestones for rights to Kosan’s epothilone compounds.

The In Vivo Blog reported on the Kosan deal that while some were underwhelmed by the price Bristol-Myers Squibb paid to acquire Kosan, "The market–and, probably Bristol as well–attached very little value to Kosan’s unpartnered projects beyond the epothilones."  In Vivo Blog further explained:

That the deal isn’t centered more around tanespimycin probably says more about the difficulties Kosan has faced with this particular molecule than it does about the value of Hsp 90 inhibitors generally. Remember Hsp90, as a target class, has been the driver of multiple buyouts and licensing deals in the past couple years. . . . Instead it probably has more to do with the fact that tanespimycin is one of several Hsp90 inhibitors in development that are derived from geldanamycin, a natural compound relatively high in molecular weight that might have trouble reaching an important hotbed of Hsp90 activity, the interior of the mitochondria. . . .

Meanwhile, Kosan’s epothilones are clearly commanding more interest. These molecules target a tumor cell’s skeletal infrastructure, much like taxanes, but via a different mechanism, and molecules like Ixempra have been specifically designed to overcome drug resistance. . . . Cornelius and co. are counting on Ixempra as a key part of its strategy to regain leadership in the cancer arena.

So, while this deal may not have resulted in a huge payoff for Kosan investors, there does seem to be a perception among at least some industry watchers that the deal–providing a 230% premium over the stock price–achieved a good result for both sides. 

1,024 total views, no views today


Category: Biotech Deals  |  Comments Off on Bristol-Myers Squibb to Acquire Kosan Biosciences for $190 million

MedImmune Settles Dispute with Genentech

Written by on Saturday, May 31st, 2008

Following up on our May 30, 2007 posting, MedImmune has finally settled its lawsuit with Genentech over a patented component of Synagis, MedImmune’s best-selling drug, which is aimed at preventing respiratory infections in infants, according to a report by the Washington Post.  The settlement comes just over a year after the Supreme Court decision was issued allowing MedImmune to challenge the validity of the Genentech patent while continuing to pay royalties incurred in a license agreement with Genentech. 

No details of the settlement have been released thus far; however, the parties are reported to be filing a stipulation of dismissal in the next few weeks.

1,077 total views, no views today


Category: Biotech Disputes, Biotech Legal Disputes  |  Comments Off on MedImmune Settles Dispute with Genentech

Outlook for Biotech Industry Mixed in 2008

Written by on Saturday, May 24th, 2008

The biotech industry may run into problems in 2008, despite having a banner year in 2007, according to a report by SF Gate.

The SF Gate reported:

[B]iotech companies may face some rough weather ahead, said Scott Morrison, Ernst & Young’s U.S. life sciences director. New product approvals will slow as drug regulators scrutinize applications in the post-Vioxx era, Morrison said.

Drug prices may face more pressure in a political environment focused on health care reform and the federal budget deficit. Beyond that, constriction in the larger capital markets has finally started to affect biotech companies this year, he said.

"Biotech has not been immune from the ills of the subprime mortgage meltdown," Morrison said. "Total fundraising year to date in 2008 is down by 60 percent."

Yet, according to a recent Ernst & Young report, biotech had a record year in 2007.  The Jacksonville Business Journal wrote of fthe findings from this report as follows:

European and American companies raised nearly $30 billion in overall financing in 2007, a banner year only surpassed by 2000.

Global venture financing reached a new high in 2007, surpassing $7.5 billion, of which $5.5 billion helped seed or nurture companies in the United States.

Global biotechnology net losses were at $2.7 billion as of 2007, down from $7.4 billion in 2006.

Ernst & Young has also concluded that the U.S. biotechnology sector is almost profitable for the first time. 

 As a result of a good 2007, the tight economy is not expected to hit the biotech industry as hard as is expected in other industries.  According to SF Gate, the Ernst & Young report indicated that nearly half of the 386 publicly traded U.S. biotechnology companies have more than two years of cash on hand, and another 27 percent have more than five years of cash. In addition, venture capitalists remain interested in biotech–more so than in other industries.

All in all, the SF Gate article suggests that the outlook is mixed for the biotech industry in 2008; however, I think that those of us working in the industry would agree that we are not overly worried about the industry’s future.  I think that it is safe to say that the future remains very bright for biotechnology.

2,348 total views, no views today


Category: Biotech Industry News  |  Comments Off on Outlook for Biotech Industry Mixed in 2008

Pharmaceutical Companies Taking Steps to Comply with New Regulations

Written by on Monday, May 19th, 2008

Pharmaceutical companies are currently ramping up their preparations to comply with new regulatatory requirements enacted to fight drug counterfeiting, according to a recent article by Mass High Tech.

Mass High Tech reported on the new regulatory requirements as follows:

[T]he federal government and nearly half of the states have enacted or proposed legislation to protect patient safety. The most far-reaching mandate is California’s electronic pedigree (e-pedigree) law. It requires electronic serialized product pedigrees for all prescription drugs at the item level (i.e., each salable item has a unique identity or serial number) and a secure chain of custody for all transactions involving that drug, starting with the pharmaceutical manufacturer.

Serialized product e-pedigrees enable the tracking and tracing of prescription drugs as they move through the supply chain to prevent counterfeit and diverted drugs from entering and remaining in the legitimate supply chain.

California recently provided the industry with additional time for full compliance, extending the implementation deadline to Jan. 1, 2011.

According to Mass High Tech, compliance with these regulations is a time-consuming and very complex process, which will require that companies comply with the new legislation more than a year prior to the implementation deadline, in order to meet the deadline at all.

The complexities of the implementation process were in fact what prompted the extension of the California deadline, according to a statement issued by Pharmaceutical Research and Manufacturers of America (“PhRMA”) Senior Vice President Ken Johnson Johnson wrote as follows:

Clearly, more time was needed for effective implementation of the e-pedigree law. And now there’s an extension of two years, which allows a longer period for a number of things to happen. For example, the makers of blood products — such as those that treat hemophilia — have two additional years to test the effects of radio-frequency identification (RFID) on the treatments. And they have more time to encourage the Food and Drug Administration to provide guidance on how companies should test to determine whether heat generated by the RFID system affects either the safety or effectiveness of blood products.

What’s more, researchers will have more time to address the technology compatibility problem that confronts those trying to implement the law. The fact is, the technology exists to track medicines, but we do not have one standard electronic serialization system everyone can use to monitor medications throughout the pharmaceutical supply chain. In addition, there’s now more time for state and local government agencies in California to resolve the budget crises they face. Organizations like the California Department of Corrections, state mental hospitals, California State University campus clinics and University of California hospitals must purchase many different expensive technologies to be in compliance with the law. And accomplishing that goal by January 1 would have been a daunting task.

In case you missed the passing of the California legislation, a summary of the text and background to the California legislation has been posted for review.

596 total views, 1 views today


Category: Biotech Legislative Developments  |  Comments Off on Pharmaceutical Companies Taking Steps to Comply with New Regulations

Chinese Patent System: Problems and Best Practices

Written by on Wednesday, May 14th, 2008

The Chinese patent system has come under increasing scutiny in the biotech and pharmaceutical industries as China has taken on a more important role in the world market.  In this week’s IP Frontline, Thomas Babel examines the Chinese patent system and answers the question: does the system really protect inventions?  He also offers some best practices for protecting inventions in China.

Babel describes a key problem with the Chinese system as follows:

China, unlike the United States, is a first-to-file system. This means that if two inventors file a patent application for the same innovation, the first to file the application with SIPO will be granted the patent even if the other inventor was the first to invent. In addition, unlike the United States where an inventor has one year from the date of the first public disclosure of the innovation to file for patent protection, public disclosure prior to filing in China is an absolute bar to the grant of a patent on the disclosed innovation, except in very limited circumstances. . . .

The combination of a first-to-file system with a system where a patent may be granted with little or no investigation results in the obvious: patents granted to non-inventors. It is a relatively easy matter, at least as to utility model and design patents, for an interloper to file for and be granted a patent on an innovation created by another person or which has been afforded protection in another jurisdiction, such as the United States. For instance, if a foreign entity has a United States patent but fails to file or register that patent in China, a Chinese company can easily take the innovation and get a utility model patent in China in its own name. The Chinese company then can use its utility model patent to prevent others, including the foreign entity, from producing products in China that incorporate that innovation.

According to Babel, another problem is the full investigations are often not conducted on patent filings.

Babel explains as follows:

Since, realistically, a full investigation has not been made by SIPO, the presumption flowing from the Chinese process presents an unfair advantage to those who improperly obtain patents. Since the burden of proof is on the person challenging a patent to show that the innovation in question is that person’s property, the various evidentiary and procedural hurdles found in the Chinese court system can make it very difficult, and perhaps impossible, to overcome the presumption and prove that an innovation was stolen by a Chinese company.

So what are some best practices to follow when trying to protect inventions in China?

Babel recommends the following:

[C]ontractually prohibit any Chinese company with which the United States inventor is dealing from filing a patent application related to any innovation found in the product it is producing for its United States customer, and/or to obligate such Chinese company to recognize that any innovation found, discovered, and/or created during the parties’ relationship is the property of the United States customer. This language can help if the Chinese company tries to seek protection of an innovation owned by a United States company. Chinese courts do have a relatively good record of enforcing contracts.

Another alternative is to require arbitration of patent disputes. The Chinese court system recognizes and will enforce arbitration decisions. Arbitration allows parties to adjudicate their disputes without having to adhere to the archaic and problematic evidentiary rules of the Chinese court system. There are a number of organizations located in Beijing and Hong Kong which can render arbitration awards that will be enforced by Chinese courts. Two of the more recognized organizations are the China International Economic and Trade Arbitration Commission in Beijing and the Hong Kong International Arbitration Centre. Many of the arbitrators employed by these organizations are Western trained, which helps to further avoid many of the archaic evidentiary and procedural rules found in the Chinese court system. Therefore, it is advisable to insert an arbitration provision in any contract with a Chinese company.

While I have not handled many transactions in China to date (although several of my clients are in the process of moving into the Chinese market, so this is likely to change in the near future), Babel’s advice is in line with what I typically advise clients who are doing business in Asia.  It is important to contractually protect intellectual property in any business relationship, and in doing business overseas, it is always a good idea to provide for the resolution of disputes by binding arbitration to the extent possible.  I typically try to steer clients toward arbitration in countries where the system of law is based on the English system, since the U.S. legal system is similarly based on the English system of law, but in the alternative, I like the idea of using Western-trained arbitrators.

1,071 total views, 1 views today


Category: Biotech Patents, Practical Tips, Private Sector  |  Comments Off on Chinese Patent System: Problems and Best Practices

Congress Examining USPTO Backlog Issues

Written by on Wednesday, May 14th, 2008

Congress is examining backlog issues at the United States Patent and Trademark Office ("USPTO"), according to a report by Peter Zura’s 271 patent blog.   The report indicated that Howard Berman, Chairman, Subcommittee on Courts, the Internet, and Intellectual Property recently sent a letter to USPTO Director Jon Dudas asking a number of questions relating to these issues.

Peter Zura’s 271 patent blog reported on the highlights of the letter as follows:

  • According to the recent GAO report titled "Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog, " the GAO found that the USPTO cannot hire enough patent examiners to reduce patent pendency in the next five years. It seems, however, that this projection is based on estimates provided by the USPTO. . . . Please provide all data related to these "USPTO estimates, " including mathematical models, and underlying statistics and assumptions such as examiner retention and productivity. Under these same assumptions, hypothetically, how many patent examiners would have to be hired in the next five years in order to reduce the patent backlog?
  • After release of the above mentioned GAO report, the USPTO issued"a press release on October 4, 2007 that stated the USPTO would"review assumptions the agency uses to establish production goals for patent examiners." Then, before the Subcommittee, Director Dudas confirmed that the USPTO has begun to study patent examiner production goals. Please provide details on the methodology of the study and personnel conducting it. What is the current progress of the study and when can Congress expect the study to be completed? To what extent is the Patent Office Professional Organization and the Patent Public Advisory Committee involved in this study. . . . .
  • Examination on Request (or, as the USPTO called it, Deferred Examination) is used in many countries such as Canada and Japan. Under such a system, applications are not examined automatically, as in the U.S., but only upon a specific Request for Examination within a set time period, say 3 years. If no request is filed within that period, the application is deemed abandoned and is never examined. From experience of other patent offices, 10% to 40% of applications are never examined under Examination on Request systems, resulting in substantial workload reduction. This is due to applicants’ voluntary abandonment of obsolete applications prior to the Request for Examination deadline. Under current USPTO practice, applications that become obsolete, but receive examination by the USPTO, are the worst investment the USPTO can make because their obsolescence means that the patents are unlikely to fetch any renewal fees.
  • Why did the USPTO reject such a method that has the potential to reduce its workload and increase efficiency?

There is no word yet on the USPTO’s response to this inquiry.  We will keep you posted of any developments that arise.  To review the full text of the letter, please see attached.

793 total views, 1 views today


Category: Biotech Legislative Developments  |  Comments Off on Congress Examining USPTO Backlog Issues

DNA Testing: Should Private Companies be able to Conduct DNA Tests Outside without Physician Input?

Written by on Wednesday, May 14th, 2008

A legal issue is brewing between companies conducting at-home DNA testing and some state governments, which object to the fact that these companies are conducting such tests without state permits and/or physician supervision, according to a report by Forbes.

Forbes reported on the issue as follows:

New York State’s Department of Health recently sent letters raising the specter of fines and jail time to 23andMe, its competitor Navigenics, their partners Illumina and Affymetrix, and five other gene-testing outfits. The state says they can’t do their scans without permits. (Navigenics says it uses a licensed doctor.) California is investigating 12 public complaints about certain mail-order gene testers.

In Maryland a health department official frets that self-prescribed gene tests have "serious potential for causing harm" if misinterpreted. Overall, 24 states prohibit or limit certain testing without a doctor’s involvement, according to the Johns Hopkins University’s Genetics & Public Policy Center.

Should the states have the ability to regulate gene testing, and should that regulation require the supervision by a licensed doctor?   This question raises some interesting public policy issues.

As a consumer, if I were to pursue gene testing, I am not sure that I would want such testing run through a physician, since in all likelihood, that would mean that the test results would end up in the hands of my insurance company, whereas, if I paid a company privately for such tests, the information is more likely to remain private.   My preference would be to have the tests privately run and then take responsibility myself for ensuring that the appropriate medical tests were run subsequently to screen for whatever illnesses that the testing had indicated I would be genetically inclined to catch.

In contrast, I am sure that a physician’s perspective would be that a physician needs access to the results in order to better treat the patient.  The physician might argue that the results are worthless unless the physician has access to the information.  He or she might even argue that it is not in the patient’s best interest to be told the results without having a physician there to interpret the data or to offer some support as needed.

I am interested in hearing what the blog readers have to say on this issue: should private companies be allowed to run gene screening tests privately without being regulated by the individual states and without requiring that the tests be run under a physician’s superivision? If you have any comments on this issue, please pass them along and we will post them to the site.

There is little doubt that this debate is going to continue to receive attention in the near future as gene testing increases in popularity.  We will keep you posted here at the California Biotech Law Blog as the debate further develops.

1,206 total views, no views today


Category: Biotech Legal Disputes  |  Comments Off on DNA Testing: Should Private Companies be able to Conduct DNA Tests Outside without Physician Input?

StemCells Files Infringement Suit Against Neuralstem

Written by on Tuesday, May 13th, 2008

Palo Alto-based StemCells filed a second lawsuit last week in a California federal court against Neuralstem alleging infringement of two patents related to human neural stem cells, reported the Associated Press

StemCells issued a press release following the filing of its complaint, which described the nature of its suit as follows:

The California action alleges that Neuralstem and its two founders infringed the Company’s U.S. Patent No. 7,115,418 (methods of proliferating human neural stem cells) and its recently issued U.S. Patent Number 7,361,505 (neural stem cell compositions of matter).  The two patents had not previously been asserted by StemCells against Neuralstem and are not part of the pending Maryland litigation initiated by StemCells in 2006, which is currently on hold by court order.   Further, the California action alleges that Neuralstem has engaged in a campaign of misinformation about StemCells’ patents and proceedings before the U.S. Patent Office.  StemCells is seeking compensatory and enhanced damages as well as injunctive relief.  

According to the Associated Press, StemCells previously filed another lawsuit against Neuralstem alleging infringement of two different patents, and Neuralstem just last week filed suit against StemCells in the same Maryland court seeking to invalidate one of the StemCells patents and alleging that StemCells committed fraud and misconduct in gaining that patent.  The Maryland case is currently on hold pending reexamination of the patents.

It goes without saying that the parties appear headed for a long and heated patent battle.  The California Biotech Law Blog will keep you posted on the legal developments as the suit  progresses.

995 total views, no views today


Category: Biotech Disputes, Biotech Legal Disputes  |  Comments Off on StemCells Files Infringement Suit Against Neuralstem

StemCells. Files Infringement Suit Against Neuralstem

Written by on Tuesday, May 13th, 2008

Palo Alto-based StemCells filed a second lawsuit last week in a California federal court against Neuralstem alleging infringement of two patents related to human neural stem cells, reported the Associated Press

StemCells issued a press release following the filing of its complaint, which described the nature of its suit as follows:

The California action alleges that Neuralstem and its two founders infringed the Company’s U.S. Patent No. 7,115,418 (methods of proliferating human neural stem cells) and its recently issued U.S. Patent Number 7,361,505 (neural stem cell compositions of matter).  The two patents had not previously been asserted by StemCells against Neuralstem and are not part of the pending Maryland litigation initiated by StemCells in 2006, which is currently on hold by court order.   Further, the California action alleges that Neuralstem has engaged in a campaign of misinformation about StemCells’ patents and proceedings before the U.S. Patent Office.  StemCells is seeking compensatory and enhanced damages as well as injunctive relief.  

According to the Associated Press, StemCells previously filed another lawsuit against Neuralstem alleging infringement of two different patents, and Neuralstem just last week filed suit against StemCells in the same Maryland court seeking to invalidate one of the StemCells patents and alleging that StemCells committed fraud and misconduct in gaining that patent.

It goes without saying that the parties appear headed for a long and heated patent battle.  The California Biotech Law Blog will keep you posted on the legal developments as the suit progresses.

974 total views, no views today


Category: Biotech Disputes  |  Comments Off on StemCells. Files Infringement Suit Against Neuralstem

China Set to Compete in Generics Market

Written by on Tuesday, May 13th, 2008

China is in the process of positioning itself to compete in the major world generics markets, according to a report by Reuters.  The Chinese move is expected to drive down generics prices below current market rates.

 Reuters reported on the Chinese strategy as follows:

Pharmaceutical information group IMS Health Inc said last year’s first okay from the U.S. Food and Drug Administration for a Chinese generic — a copy of AIDS drug nevirapine — was a sign of things to come. . . .

Zhejiang Huahai Pharmaceutical Co Ltd won a U.S. green light last July to sell generic nevirapine, once the patent held by Germany’s Boehringer Ingelheim expires in 2012.At least 10 other Chinese companies are set to follow suit with other generic products, according to IMS. Some could be available as early as this year. The result will be increased competition in a generic drugs industry that is already struggling with tumbling prices.

"In order to ensure their success in the market, the Chinese manufacturers are likely to undercut all others on price," IMS said in its annual Intelligence.360 report.

According to Reuters, the one potential roadblock that Chinese companies are likely to encounter is the fact that they do not have a good reputation for quality, particularly in light of the recent heparin scandal.  This may give Indian companies, which are also trying to enter the generics market, a competitive advantage.

As a consumer, I welcome the additional competition, which will ultimately result in lower prices at the drugstore.  With all the recent Chinese safety scandals, however, I cannot help but wonder if the increased presence of Chinese generics companies in the marketplace is going to end up generating even more safety problems for American consumers–and perhaps even more legal problems as well.  Hopefully the FDA is following what is happening in China and responds accordingly to better ensure that U.S. consumers are not purchasing unsafe Chinese products.

989 total views, no views today


Category: Biotech Industry News  |  Comments Off on China Set to Compete in Generics Market

© 2008-2015 The Prinz Law Office. All rights reserved.

The Prinz Law Office | Silicon Valley, CA | Los Angeles, CA | Orange County, CA | San Diego, CA | Atlanta, GA | Tel: 1.800.884.2124

Mailing Address: 117 Bernal Rd., Suite 70-110, San Jose, CA 95119; Silicon Valley Office: San Jose- 2033 Gateway Place, 5th Floor, San Jose, CA 95110 (408)884-2854; Los Angeles Office: 3110 Main St., Building C, Santa Monica, CA 90405 (310)907-9218; Orange County Office: 100 Spectrum Center Drive, 9th Floor, Irvine, CA 92618 (949)236-6777; San Diego Office: 4455 Murphy Canyon Road, Suite 100, San Diego, CA 92123 (619)354-2727 Atlanta Office: 1000 Parkwood Circle, Suite 900, Atlanta, Georgia 30339 (404)479-2470

Biotech Lawyer & Attorney: Serving Silicon Valley, San Jose, San Francisco, Santa Cruz, San Diego, Los Angeles, Orange County, Irvine, Anaheim, Santa Monica, Silicon Beach, Santa Barbara, Sacramento, Atlanta. Licensed in California and Georgia.
Follow

Get every new post delivered to your Inbox

Join other followers