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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« By Any Other Name | Main | Darn Photons »

September 20, 2006

Imclone, Drama Queen of Biotech

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Posted by Derek

So, it turns out that Imclone doesn't actually own a key patent covering uses of its only money-maker, Erbitux. This case has been dragging on for years in one form or another, a bizarre story well chronicled here at Fortune. This is another case of prior art invalidating a patent:

The trial is the culmination of a strange 20-year saga. It pits three distinguished scientists from Israel's Weizmann Institute against ex-colleague Joseph Schlessinger. . .The scientists accuse Schlessinger of absconding with their idea of combining a monoclonal antibody with chemotherapy, taking it to a corporate predecessor of Sanofi-Aventis, and secretly applying for a patent on it. While the application was pending, Aventis licensed the rights exclusively to ImClone. (Schlessinger denied impropriety and claimed credit for the antibody and the combination.)

ImClone had reason to question who the inventor was as early as 1994, when the U.S. Patent Office rejected its application on the grounds that the Weizmann scientists had published an article describing the combination idea before Aventis filed for the patent. ImClone told the patent office it would provide support for its claim, then dropped the application. The company later refiled, and the patent office relented.

Imclone was never able to back up that claim in the end, so out goes their patent. (The Israeli scientists, as Yeda Research and Development, still have a valid patent of their own which they just licensed to Amgen). This is the sort of thing that I don't think should be patented to start with - I have a big problem with broad method-of-treatment claims - but the prior publication makes that a moot point in this case as far as Imclone's concerned. Analysts are estimating that this loss could cut Imclone's earnings by 10 to 20 per cent, which they certainly don't need.

Carl Icahn, the company's largest individual shareholder (behind Bristol-Meyers Squibb), has seen enough. He was elected to the board of directors today, and lost no time sending an open letter calling for the CEO's head. Icahn's no fool as an investor, but I have to question his judgment in hanging on to his Imclone position with such tenacity. Not that Big Carl cares, but I've been telling people to sell the stuff for a long time now, because I don't like their prospects.

I didn't count on this patent loss, though - I just had them downrated in general. And it seems this opinion is shared by others in the industry. Back earlier this year Imclone announced with great blasts of trumpets that it would entertain offers to be bought. Reaction to this opportunity didn't meet their expectations, though, because in August they took themselves off the block, saying that the offers they'd received had been inadequate. It's especially notable that Bristol-Meyers Squibb didn't see fit to buy them out, especially considering that many of Imclone's stockholding fanatics have always seen that as a safety net.

So if BMS, who know Imclone inside out, doesn't want them, why does Carl Icahn? The stock did make it back to $40 per share after I last stuck my tongue out at it around $34. But now it's at $29. . .

Update: as per the comments, here's an excellent and detailed summary of this litigation from PatentBaristas. There are a lot of odd features to the case - check out the part where the Imclone scientist had a suspiciously good memory of a key conversation from twenty years ago. . .

Comments (10) + TrackBacks (0) | Category: Business and Markets | Cancer


COMMENTS

1. katre on September 20, 2006 8:53 PM writes...

That's the problem with being the largest shareholder: if you try and sell out, you're putting enough shares on the market to seriously dilute the price, and you'll never get the supposed "value", especially after news like this. It's like the old saying about owing the bank a thousand dollars versus a million.

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2. Petros on September 21, 2006 1:56 AM writes...

And yet another reason to question BMS' due diligence in assessing Imclone's propsects when BMS chose to pay so much for the US rights to Erbitux!

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3. Petros on September 21, 2006 4:09 AM writes...

An intersting description of the case at PatentBaristas

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4. tom bartlett on September 21, 2006 8:49 AM writes...

BMS= Bumbling Mistake Syndicate

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5. Hap on September 21, 2006 12:49 PM writes...

How does Imclone intend to appeal this? The description in the article linked seems to comprehensively demolish their claims - if you have no physical evidence that you ever came up with the patented idea (and you had the antibodies, so a trial of "your" idea would have been easy to do in your lab rather than 10 000 km away, and easy to support after having done so with data), and you use the drawings from the draft of the paper published by your coworkers (implying that you didn't have any data or pictures of your own, which makes no sense if you had come up with the idea and instructed them to implement it, or if you had done it on your own), and you hide your patent application from your coworkers, it seems hard to argue that the patented idea was actually yours. I lack enough imagination to see an explanation in which the patent inventors came up with the idea and should hold the patent and which explains these problems.

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6. Derek Lowe on September 21, 2006 12:57 PM writes...

I think this is one of those "XYZ says it will appeal the verdict" statements that are issued to save face. You wonder how many of these are ever filed.

Of course, there's the old legal adage: "When the facts are on your side, pound on the facts. When the law is on your side, pound on the law. When neither one is on your side, pound on the table".

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7. Mouth of the Yellow River on September 24, 2006 5:10 PM writes...

Ni Hao! Kannichi Wa!

An astounding aspect of the report of the court proceedings was that the defendant Schlessinger used name dropping that he was a nominee for a Nobel Prize, among the 20 most cited scientists in the USA and was Chair of an Ivy League department as part of his defense.

This indicates the sorry state of the scientific industry with the implication that such a record gives one a blank check for taking the innovative ideas of others and technically developing them on the sly.

Fortunately, although such an individual can fool the entire scientific culture, its so called peer reviewers, publication industry, and prize committees (Nobel, National Academy, etc.) over a career, it did not fool the court:

By contrast, she [Judge Buchwald] repeatedly assailed the testimony of Schlessinger, who testified that he'd been nominated for a Nobel Prize and is now the chair of pharmacology at Yale University's School Of Medicine. "Schlessinger's explanation... can most generously be described as strained," Judge Buchwald wrote in her opinion.

Elsewhere, she commented that "This exchange represents one of many instances in which Schlessinger exhibited great reluctance to acknowledge a fact that he perceived to be injurious to the defendants' case." In various places, her opinion dismissed his testimony as "not credible," "contorted," "incredible" and "wholly unsubstantiated by any contemporaneous records."

Source: CNNMoney.com

One wonders if this individual and many individuals of this genre with high visibility and power have largely made the bulk of their career on the backs of others ideas, hypotheses and preliminary data in the academic arena by secretly and quickly carrying them out in the technical arena as attempted here in respect to intellectual property.

MOTYR

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8. Dave on September 25, 2006 10:54 AM writes...

In contrast to Imclone, not only did Amgen license the valid patent from the actual inventors (the "866" Yeda patent), they also developed the superior anti-EGFR therapeutic in Vectibix.

Not even Martha Stewart could turn Imclown's lemons to lemonade!

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9. Dave on September 25, 2006 11:00 AM writes...

In contrast to Imclone, not only did Amgen license the valid patent from the actual inventors (the "866" Yeda patent), they also developed the superior anti-EGFR therapeutic in Vectibix.

Not even Martha Stewart could turn Imclown's lemons to lemonade!

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10. Mouth of the Yellow River on September 26, 2006 8:52 PM writes...

Ni Hao! Kannichi Wa! Nota Bene to the post above from the Mouth

To tout oneself or anyone else as a "nominee" of a Nobel Prize, even to know you are a nominee is a corruption of the entire process of disputes over intellectual property, funding or publication priority. Any delusionary individual apparently can declare they are a nominee for the Nobel Prize.

According to the Statutes of the Nobel Foundation, information about the nominations is not to be disclosed, publicly or privately, for a period of fifty years. The restriction not only concerns the nominees and nominators, but also investigations and opinions in the awarding of a prize. Nomination information older than fifty years is public. At this web site the Nomination Databases for the Nobel Prize in Physiology or Medicine, 1901-1951 and for the Nobel Peace Prize, 1901-1955 are now available.

Bottom line: The Nobel Prize is a farce, ultimate in hypocrisy, rigged politically, antiquated and quite disastrous for our reality-based scientific future that should be based on knowledge, just like the corrupt so-called peer review system in general, both for dissemination of information and for funding.

The current review system based on a so-called expert panel who are largely experts in their own minds and the non-scientist administrators who pick them is in shambles and sending our basic science culture down the road to disaster and mindless documentation of illusory and useless trivia.

It is time for a jury system with a voir dire process with at least 6 to 12 jurors (reviewers) per manuscript or proposal with equal vote and a judge (editor) picked very carefully and fairly (possibly elected) similar to patent and intellectual property disputes.

MOTYR

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