Biogen Settles Drug Patent Suit

Biogen Inc. said Thursday that it has settled a lawsuit with New Jersey-based Berlex Laboratories over a patent infringement claim related to Avonex, Biogen's flagship drug used to treat multiple sclerosis. Under the settlement agreement, Cambridge, Mass.-based Biogen will pay Berlex $20 million and receive a fully paid up, royalty-free, non-exclusive license under the patents held by Berlex.

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Biogen Inc. said Thursday that it has settled a lawsuit with Berlex Laboratories Inc. over a patent infringement claim related to a drug used to treat multiple sclerosis. Biogen’s flagship drug, Avonex, is a human beta interferon product. So is Betaseron, which is marketed by Berlex. Both have been approved by the U.S. Food and Drug Administration for the treatment of multiple sclerosis. In August 2000, a federal judge in Boston ruled that Cambridge, Mass.-based Biogen did not infringe on patents owned by New Jersey-based Berlex Laboratories. Berlex appealed that ruling. That appeal is still pending. Under the settlement agreement, Biogen will pay Berlex $20 million and receive a fully paid up, royalty-free, non-exclusive license under the patents held by Berlex. A second and final payment from Biogen to Berlex will also be made if an appeals court reverses the lower court’s ruling in favor of Biogen. The agreement calls for a final payment of $55 million if the 1st U.S. Circuit Court of Appeals rules against Biogen and returns the case to U.S. District Court. If the appeals court completely reverses the decision favoring Biogen, then Biogen would have to make a final payment of $230 million. Biogen spokeswoman Kathleen O’Donnell said the company believes both those scenarios are unlikely. “The rulings of the court … are leading us to believe that the $20 million will be the exact payment,” she said. Peter Kellogg, Biogen’s chief financial officer, said the company wanted to settle the case, which has dragged on for almost six years. “We are the worldwide leader of Avonex; the business is growing very rapidly. [The company felt] this has gone on long enough and we should just resolve it and move on,” he said. As part of the settlement, the companies agreed not to pursue further litigation over the patents. Biogen has taken a $20 million charge against earnings in its fourth quarter 2001 to cover the costs of the settlement. Biogen reported earnings of $58.9 million, or 39 cents per share, in the fourth quarter, including the $20 million charge, compared with $71.8 million, or 47 cents per share, in the same period a year ago. In afternoon trading on the New York Stock Exchange, Biogen shares rose 25 cents to $55.22. Copyright 2002 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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