The Applera patent infringement lawsuit filed against Bio-Rad, MJ Research, and Stratagene last week — literally within hours of the company receiving US Patent No. 6,814,934, “Instrument for monitoring nucleic acid amplification” — may be the next step in an effort to protect its dominant position in PCR instrumentation.
“It’s a change of tack,” said Adam Chazan, an analyst with Pacific Growth Equities of San Francisco, which follows Applera and many other molecular biology tool vendors. “It’s not clear whether this is a move to get people on board with a new licensing program, or is this a move to restrict RT-PCR to a handful of parties.”
Applera’s complaint, filed in US Court for the District of Connecticut in New Haven, seeks a permanent injunction against all three companies from infringing the patent and “an order that Bio-Rad, MJ Research, and Stratagene destroy their inventory of infringing instruments.” In addition, the suit seeks “compensatory damages in the form of lost profits, but not less than a reasonable royalty” resulting from the alleged infringement.
In last week’s suit, Applera alleged that MJ Research’s Opticon, Opticon 2, and Chromo 4 systems; Bio-Rad’s iCycler iQ and MyiQ instruments; and Stratagene’s Mx4000 and Mx3000P instruments infringe its ‘934 patent.
The suit followed injunctions filed by ABI in Europe in June, enjoining Bio-Rad Laboratories, MJ Research, and MJ Research distributor Biozym in Germany from manufacturing and selling thermal cyclers for real-time PCR. The injunctions were issued by the German District Court in D sseldorf. The court found that the defendants infringed a German patent corresponding to European Patent No. 872562, issued to ABI’s parent company Applera in September 2002.
In April 2003, ABI obtained a similar injunction against Bio-Rad in Japan based on a Japanese patent.
Also in June, Cepheid expanded its license to Applera’s core PCR patents to include real-time PCR for applications in thermal cyclers. Cepheid obtained a non-exclusive global license to make, use, and sell its SmartCycler and GeneXpert brand thermal cyclers, as well as other Cepheid thermal cyclers, using Applera’s real-time PCR technology.
The next milestone in the case is the discovery deadline, which is set for May 11, according to court documents.
But, the real deadline, at least for Applera and its Applied Biosystems unit, may be March 2005 in the US, and March 2006 in Europe, when the first of the patents on PCR expire.
In filings with the SEC, ABI said that it expects a possible reduction in PCR royalties beyond 2005 to be offset to a “substantial degree” by income from real-time PCR and other related technologies that it owns that should mitigate the effects of the patent expirations.
ABI measures the core PCR market at $600 million a year with a three-year forward growth rate of upwards of 5 percent. But, the PCR process underlies many of the company’s molecular biology technologies including DNA sample prep ($120 million annually), sequencing ($660 million), forensics ($120 million), genotyping ($280 million), and gene expression ($1.2 billion). (See BCW, 9/16/2004).
In a reorganization announced in August, the company’s RT-PCR products are now managed through its molecular biology unit, one of four new divisions created, including proteomics and small molecules, applied markets, and service.
The suit filed last week targets real-time thermal cycler instrumentation, which is a solid-state semiconductor-based instrument. This technology brings quantitation to the PCR process, allowing the collection of real-time measurements during the amplification period. The process is enabled by measuring fluorescence resulting from the reaction of the chemistry and the sample.
RT-PCR thermal cyclers are relatively early in commercial development. A Frost and Sullivan study from 2002 estimates thermal cycler sales growing to $776 million by 2006 from $252 million in 2001.
Viram Wadhawani, industry analyst for drug discovery technologies for Frost and Sullivan, told BioCommerce Week that ABI holds a 50 percent market share in real-time thermal cyclers, while Roche holds a 9 percent share; and Bio-Rad has 12 percent share. MJ Research, with a 6 percent market share, is among a handful of companies, including Stratagene, with single-digit market shares.
In instrument shares for next year, Wadhawani said that he projects 12 percent growth for ABI, and about 14 to 15 percent growth for Bio-Rad and its acquired MJ Research, respectively.
“The entire market is growing,” he said. “People are seeing the utility of this technology.”
Certainly, RT-PCR is a technology ripe for adoption, according to a recent survey of 2000 scientists conducted by market researcher BioCompare. According to the survey, released in October, some two thirds of the respondents of the Internet-based survey said that RT-PCR topped their lists of new technologies they would like to introduce into their labs in 2005.
But, the real prize may be the molecular diagnostics marketplace.
“Real-time analysis is much better; you don’t have to do anything after the PCR is finished,” Theodore Mifflin of the Medial Automation Research Center of the University of Virginia told BioCommerce Week. “Historically, that is when you would have to open the vials up and do post-amplification analysis. We were doing that, all of these restriction digests, running acrylimide gels, imaging the gels. Man, it was real pain and it was real expensive. It took a lot more time to do the post-analysis than the PCR.
“The real beauty of doing real-time is two-fold,” he said. “You get to do this in the much shorter time period, and once you finish monitoring the reaction, you are done. I would say there would be a push to do more of this testing because of the growing shortage of [labor].”
ABI is moving to provide products that streamline the process.
In October, ABI introduced the ABI 9800 Fast PCR system, which streamlines 96-well plate PCR results to a 25-minute period.
ABI’s RT-PCR systems product line, which was previously called Sequence Detection Systems, includes four real-time PCR instruments systems that use TaqMan chemistry — the Prism 7900HT Sequence Detection System; the Prism 7000 Sequence Detection System; the 7300 Real-Time PCR System; and the 7500 Real-Time PCR System. The company began marketing the model 7300 and 7500 systems during FY ‘04.
— Mo Krochmal ([email protected])