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Rockefeller U Nets at Least $7M from Ligand after Settling IP Row over Blood Disease Rx


Ligand Pharmaceuticals and Rockefeller University said this week that they have settled a legal dispute related to the development of the drug eltrombopag, which was recently approved by US regulatory authorities to treat thrombocytopenia, or abnormally low platelet counts.

The settlement brings to a close a legal battle that has been ongoing since 2003, and effectively terminates a licensing agreement signed between Rockefeller and Ligand in 1992 related to patents and know-how surrounding peptidyl hormone-mediated gene expression discovered primarily by a Rockefeller scientist.

Under the settlement, Ligand said it will pay $5 million up front and $2 million over the next two years, as well as royalties derived from product sales, including royalties for related compounds sold by GlaxoSmithKline under a 1994 licensing agreement between GSK and Ligand.

Rockefeller's royalties will depend on the overall sales of two products: eltrombopag, which is sold by GSK in the US as Promacta and in the EU as Revolade under a commercial agreement with Ligand; and LGD-4665, a small-molecule thrombopoietin mimetic that Ligand is currently shepherding through phase II clinical trials.

Specifically, Ligand said it will pay Rockefeller a 5.88-percent share of royalties it receives from GSK on worldwide annual sales of eltrombopag of up to $1.5 billion; and a 7-percent share of royalties it receives from GSK on sales of eltrombopag greater than $1.5 billion in any given year.

In addition, Ligand will pay Rockefeller 1.5 percent of worldwide annual net sales of LGD-4665. Ligand will also pay Rockefeller half of any future milestone payments it receives from GSK under the license agreement between GSK and Ligand, but will not share any milestone payments with Rockefeller related to LGD-4665.

The settlement will provide a significant financial boost to Rockefeller. In its most recent annual report for its 2008 fiscal year, which ended on June 30, 2008, Rockefeller reported approximately $13.4 million in "rent, royalty, and other income" compared with $28.4 million in FY 2007. Thus, the upfront payments from Ligand alone over the next two years would appear to be worth at least half of all the royalties Rockefeller realized in its most recent fiscal year.

The Association of University Technology Managers does not publish metrics for Rockefeller in its annual licensing activity survey; nor does Rockefeller disclose specific licensing revenue figures in its annual reports. A Rockefeller spokesperson told BTW this week that the school is not commenting on aspects of its settlement beyond what has been included in a statement from Ligand.

The legal dispute dates back to a 1992 licensing agreement between Rockefeller and Ligand under which Ligand licensed certain technology relating to cytokine-activated signal transducers and transcription activators, or STATs, to control gene expression.

This technology was primarily discovered in the laboratory of Rockefeller researcher James Darnell, currently a professor of molecular cell biology at the school. Darnell also served for several years as a member of Ligand's scientific advisory board.

On March 4, 2008, Rockefeller sued Ligand in the Supreme Court of the State of New York alleging, among other things, that the company breached the terms of their 1992 license agreement.

Ligand denied the claims and filed an answer and countersuit claiming that the original licensing agreement generally covered certain patent rights and technical information related to peptidyl hormone-mediated gene expression.

Court documents submitted by Ligand as part of its counterclaim also state that the agreement "contemplated that certain of the [IP] of Rockefeller might be used by Ligand in development of new pharmaceutical agents," and that the agreement did not preclude Ligand from "developing processes and products relating to cell-based assays to screen candidate drugs independent of Rockefeller's [IP]."

Ligand said it developed and used these cellular assays to screen for mimics of small-molecule thrombopoietin, or TPO, a peptidyl hormone, according to court documents.

In 1994, Ligand entered into its collaboration with GSK that resulted in the discovery of small-molecule compounds that modulated certain hematopoietic growth factors, including TPO. One of these compounds was eltrombopag, and Ligand alleged that Rockefeller knew of the Ligand-GSK partnership since its earlier days and only became interested in a royalty stake after GSK began clinical trials for the drug.

As disclosed this week, Ligand and Rockefeller eventually decided to settle their dispute out of court. In a statement, Ligand said that even though it does not believe that it requires a license from Rockefeller for its ongoing business activities, Rockefeller "granted the company and its sublicensees a covenant not to sue under any patents or know-how that were the subject of the license agreement for any past, present, or future use of such patents or know-how."

Ligand has also agreed to dismiss all counterclaims asserted in the ongoing litigation.

In a statement, Ligand President and CEO John Higgins said the firm is "pleased with the amicable resolution of this matter. We believe the settlement with Rockefeller is in the best interest of our company and our shareholders."

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