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NIH, Research Groups Submit Dx, Biomarker IP to 'Patent Supermarket' for Non-Exclusive Licensing

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Several high-profile research organizations, including the National Institutes of Health, have contributed a number of personalized medicine-focused biomarker- and diagnostics-related patents to a new intellectual property licensing "supermarket" called Librassay.

Operated by patent-pooling firm MPEG LA, Librassay currently houses some 400 medical diagnostics-related patent rights. IP holders submit patents to Librassay that they want to license nonexclusively for commercial diagnostic use. MPEG-LA also grants a royalty-free license to those seeking to use the IP for educational purposes or for research.

The NIH and several academic and research entities – Johns Hopkins University, Ludwig Institute for Cancer Research, Memorial Sloan-Kettering Cancer Center, Partners Healthcare, Stanford University, the University of Pennsylvania, and the University of California, San Francisco – have so far contributed patents to Librassay.

According to MPEG LA CEO Larry Horn, one of the factors spurring participation in Librassay is the growing realization among research and academic organizations that, as whole-genome sequencing research reveals the complexity of associations between biomarkers, environment, and disease, commercially available diagnostics will increasingly gauge panels of markers in multiplex fashion. In order to advance the field of personalized medicine, test developers will need nonexclusive access to a range of biomarker patents in order to develop tests that can assess the likelihood that patients have or will develop a disease, and whether they will respond to certain drugs.

"One of the factors why these institutions were ripe for the discussions we entered into with them is that we're in the genetic era, the era of the biomarker and cheap whole-genome sequencing," Horn told PGx Reporter. "It's clear that things are going to have to be tested across different genes and different biomarkers in order to improve patient outcomes. It's clear that the science is there for [such tests] to develop if only the intellectual property that follows this could be secured."

A survey of the Librassay website, which lists the patents available for licensing, breaks down the IP according to different conditions, such as autoimmune disease, cancer, and diseases affecting the heart and the central nervous system. Under the cancer category, for example, one can search for patents related to assays, biomaterials, diagnostics, drug discovery, test kits, patient monitoring, prognosis, or therapeutic indicators.

"The big break for us was the realization that we're not in the business of calling winners and losers. So, we're not here to say which test is going to emerge next or which test would be good to have. That's not our call," Horn said. "Instead of building the business model that supports specific tests and grabs onto those patents, we decided to go for a broad array of biomarker patents and let the market self-select which ones would be useful to them for specific tests that emerge."

The NIH submitted 179 US and foreign patents to Librassay. The IP covers technologies related to a range of uses, including reagents, diagnostic services, and kits that could be used for advancing treatment strategies in cancer, infectious disease, and metabolic disease. Some of NIH's patents in Librassay have previously been licensed, while others haven’t, according to Mark Rohrbaugh, director of NIH's Office of Technology Transfer.

Submitting IP to Librassay wasn't "a controversial decision" for NIH, Rohrbaugh told PGx Reporter. "We're always looking for new ways to facilitate the licensing of NIH and federal labs' inventions, to facilitate their development and commercialization and, ultimately, benefit public health," he noted.

Another Librassay participant, UCSF, didn't detail the types of patents it submitted to the service. However, Erik Lium, assistant vice chancellor of the university's Office of Innovation, Technology & Alliances, noted that the university is "contributing patents for diagnostic and research tools that [it] believes are well suited to nonexclusive licensing, and for which the intellectual property landscape is complex.

"Nonexclusive licensing strategies in specific fields such as diagnostics can accelerate the development of important healthcare technologies for public benefit," Lium said. "Librassay addresses a challenge that is often referred to as patent thickets, which are common in the field of diagnostics, by providing a one-stop shop for companies to efficiently access the intellectual property rights that they need and that may be held by numerous parties."

This bolus of patent submissions to Librassay has arrived against the backdrop of a high-profile lawsuit, Association for Molecular Pathology et al. v. US Patent and Trademark Office et al., in which healthcare providers, patients, and researchers represented by the Public Patent Foundation and the ACLU are challenging patents held by the University of Utah and exclusively licensed to Myriad on BRCA 1 and BRCA 2 genes. Mutations in BRCA 1 and BRCA 2 are associated with heightened risk of familial breast and ovarian cancer, and Myriad markets a test, BRACAnalysis, which gauges patients' risk for these conditions (PGx Reporter 8/22/2012).

In that case, patients have asserted that Myriad's stringent enforcement of its exclusive licenses covering these genes and the related test has restricted them from getting secondary testing to confirm whether BRACAnalysis test results are correct. Furthermore, researchers have testified that Myriad has enforced its exclusive licenses related to BRCA 1/2 gene mutations in a manner that restricts them from conducting this type of testing as part of breast and ovarian cancer clinical investigations that report test results to study participants.

Many industry observers now characterize the Myriad case as an outlier and say that since those BRCA patents were exclusively licensed in the 1990s, licensing behavior among life sciences players has shifted toward more nonexclusive deals. The existence of Librassay, and the patent contribution by NIH, UCSF, and others, may be a signal that inventors in the life sciences field are increasingly thinking about the impact that overly stringent licensing pacts can have on patient access and research. Kristin Neuman, Librassay executive director, highlighted that not only are patents included in the service offered royalty-free for research use, but there is no restriction against informing study participants of their test results.

Additionally, "the advantage of offering these licenses nonexclusively through [a service like Librassay] is that it allows for confirmatory testing," NIH's Rohrbaugh said. "One concern for patients with diagnostic tests is that if only one party is providing testing, it makes it difficult to have confirmatory testing or to develop the technology in a different direction than an exclusive licensee might. So, by allowing these technologies to be licensed nonexclusively it addresses some of those concerns that the patients and physicians have raised with respect to diagnostics."

Accounting for Commercial Interests

However, participation in Librassay doesn't mean that these institutions and academic centers are backing away from exclusive licensing deals. While the NIH encourages nonexclusive licensing whenever possible, it is also sensitive to the investment that industry partners need to make in order to commercialize particular inventions. In addition, industry licensing requirements can vary depending on the company's business model or testing platform.

For example, companies developing microarray-based tests "generally support nonexclusive licensing in order to make them available broadly, because they realize that they're not likely to have access to every single technology exclusively, and nor do they need it. If you're going to put a hundred or a thousand genes on a chip … it's got to be nonexclusive," Rohrbaugh said.

Likewise, "to the extent that it's known that a diagnostic test works, or that [a biomarker] association [with a drug or disease] works, and someone has demonstrated its usefulness clinically, then the developmental cost and risk are much lower for a company and a nonexclusive license may be sufficient for them, especially if they're marrying it with a treatment or if a physician is using it to test cancer patients," he explained. "If it's something that can be used off the shelf in a university testing lab or doesn't require a lot of risk and investment by a company, then [industry is] often satisfied with a nonexclusive license."

However, according to Neuman, NIH has excluded from Librassay biomarkers related to Class III in vitro diagnostics. In the US Food and Drug Administration's three-class regulatory classification system for devices, those deemed Class III pose the highest risk to the patient. For example, the agency considers molecular tests that pick out best responders to drugs as high-risk devices, and FDA-approved companion diagnostics generally fall in the Class III category. Neuman said that licensees can contact NIH directly to inquire about licensing NIH patents for Class III IVDs.

According to Rohrbaugh, NIH pursues exclusive licensing deals for inventions that are likely to not be developed and commercialized without a company making a significant investment and taking on substantial risk. "In that case, you're talking about FDA-approved products, and not [about] … simpler test kits," he explained. "So, something that is a Class III device … will require a higher showing of safety and efficacy in clinical trials by FDA, and that would require more risk and expense from a company developing it. We will grant exclusive licensing for certain test kits but not for testing services or non-FDA approved diagnostic and research uses."

In Horn's view, Librassay's model is viable because life sciences industry players are likely to be more comfortable sharing licenses for diagnostic markers than they are sharing patent rights for drugs. "In general, the bar to doing diagnostic tests … is not as steep, except for in a very few instances, as it is for drugs. The willingness to commercialize without the exclusivity is a much greater segment of the market than it is for drugs, where it is non-existent," he said.

MPEG LA estimates that between 75 percent and 80 percent of diagnostics-related patents are owned by academic and research institutions. "In our model, in order to make room for the nonexclusivity and to make patent rights available for the diagnostics field of use, we were able to persuade academic institutions and research institutions and others that it didn't have to be an all-or-nothing proposition," Horn said. "If they had a discovery, they didn't have to give it all away in order to satisfy a drug developers' need for the exclusivity of the patents for that purpose."

Still, the institutions participating in Librassay are careful not to paint themselves as being against exclusive licensing arrangements, but rather characterize themselves as flexible in IP dealings in order to meet the needs of industry partners while addressing patient-access issues. UCSF's Lium refrained from commenting on whether pharma and diagnostic partners are comfortable with nonexclusive licensing deals on personalized medicine-related diagnostics or gene patents.

"These are both very complex issues and we would prefer not to comment on what we believe industry feels about exclusive versus nonexclusive licensing," Lium said. "For us, the bottom line is that UCSF is committed to technology licensing strategies that advance healthcare and our understanding of the biology that underpins it."

While licensing trends are hard to pin down due to the patchwork of interests between different stakeholders, many single-analyte molecular diagnostics are currently available from multiple providers. For example, companion diagnostics, such as KRAS mutation testing to identify colorectal cancer patients who will respond to certain monoclonal antibodies, are available from multiple labs and diagnostic developers. The situation is similar for ALK mutation testing in lung cancer and BRAF testing in melanoma. It's unknown whether this is the result of nonexclusive licensing deals or the lack of patent enforcement.

The licensing landscape for multi-marker tests is even more complex and opaque. Molecular diagnostics firm Genomic Health said it is engaged in advancing "proprietary" clinical discovery. However, the company's 21-gene Oncotype DX breast cancer recurrence test includes expression measurements for the known markers HER2, estrogen receptor, and progesterone receptor, and the company also reports the expression of these genes separately.

"The novel biomarkers used in our marketed tests are the exclusive intellectual property of Genomic Health," a company spokesperson said. "Like most diagnostic companies, Genomic Health has nonexclusive licenses to certain aspects of our ... RT-PCR platform" underlying the Oncotype DX brand of tests.

Genomic Health is currently in the process of growing its capabilities to discover novel cancer-associated markers, having established in-house next-generation sequencing capabilities, and has inked collaborations with drug developers, such as OncoMed, to help them advance personalized oncology treatments. It is unknown how Genomic Health structures IP rights with pharma collaborators for novel markers it discovers.

Where Patents Go to Die?

A patent expert who advises companies in the personalized medicine space agreed that as multiplex and multi-marker tests come to market, creative non-exclusive licensing models will be necessary, but he hasn't yet seen a marked shift in his clients' mentality.

"I can't imagine that if it's a patent that's really of value, that will provide an organization with exclusivity in any area, that they would put it in this [service]," said the expert, who asked to remain anonymous to protect the interests of clients participating in Librassay. "Big academic and research organizations generate a lot of patents and not all of it gets licensed. Instead of abandoning them, my feeling is, [Librassay] may be a good place to put them. It's where patents go to die."

While acknowledging that industry players may be more willing to accept nonexclusive licensing arrangements for certain types of diagnostics than they are for drugs, the source said that universities and hospitals looking to commercialize technologies that would require a significant investment still first try for exclusive licenses in order to get a return on their investment. "You spent all the money to file on it, to get a patent, and now you put it into this licensing service. It doesn't make sense," the expert said. "Maybe for ones you've tried to license exclusively and were unable to, you can put those in the service. Going forward, if you're developing something knowing you're going to put it into Librassay, I don't know what advantage you get."

Counter to this, MPEG LA's Horn said he has been "pleasantly surprised" by the quality of patents submitted to Librassay. "We learned there was a lot available to us," he said. For some of the patents, "these institutions may not have had an easy time licensing a certain biomarker IP on a one-off basis, [but] the opportunity to license them in combination with other IP owned by other institutions in the face of these emerging multiplex, multi-marker tests was a very attractive opportunity."

Other patents submitted to Librassay Horn characterized as "cutting edge," representing the patent holder's first attempt at widely marketing the IP. Horn recognized that certain biomarker patents in Librassay may be aging in their patent life cycle, but could not say whether in those cases the patent holder submitted to Librassay after unsuccessfully trying to license it exclusively to industry.

Generally, Horn feels that the Librassay concept has been well received by academic and research institutions. "We had to craft the right balance of incentives that made them want to contribute their IP and [they felt] that they were getting a fair share from any royalties that might develop from it," he said of the organizations that have so far submitted patents to the licensing marketplace. MPEG LA has also had conversations with some commercial firms and expects companies to participate as licensees as well as submit IP for nonexclusive licensing.

"Go forward a few years, if Librassay is successful, then it will be even more in people's heads that this is a different path and one they should leave open," he said.

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