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Roche Diagnostics, Promega, Luminex, Lynx Therapeutics, Genaissance, Transgenomic, Interleukin Genetics, GenoMed, McGill University, Nuvelo, Orchid Biosciences

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Court Rejects Promega’s PCR Claims Against Roche; Roche Now Plans to Sue Promega

Roche Diagnostics has claimed a “substantial legal victory” following a California US District Court ruling that blocked an effort by Promega to overturn several patents in Roche’s PCR intellectual property portfolio.

The court on Tuesday rejected Promega’s claim that two of Roche’s “foundational” PCR process patents, US Patent Nos. 4,683,195 and 4,683,202, were unenforceable. Another Roche patent, US Patent No. 4,889,818, which covers the thermostable DNA polymerase enzyme from Thermus aquaticus, or “Taq,” is still considered unenforceable, however, due to a previous finding of “inequitable conduct” — or misrepresentations to the patent office — when Roche obtained the ‘818 patent. The Swiss giant said it plans to appeal this determination, which was overturned by the appellate court in a previous round of the litigation battle.

Lanny Davis, outside counsel to Roche, said in a statement that “no misrepresentations were made about the molecular weight of Taq, its distinguishing feature over the prior art. We believe that, after balancing the equities, the appellate court will affirm the Taq patent’s enforceability.”

Davis, from the firm of Orrick, Herrington & Sutcliffe, downplayed the significance of the ‘818 patent. “If the metaphor is an apple, the ‘195 and the ‘202 [patents] are the core, and the Taq microbe, while significant, has alternatives. It’s not even on the apple,” he told GenomeWeb News, Pharmacogenomics Reporter’s sister publication, this week.

Davis added that Roche is also claiming a second, “more important” victory than the rejection of Promega’s patent unenforceability claims: The California court’s ruling will also enable Roche to sue Promega, alleging that the company tried to induce its customers to break their Roche PCR licenses and buy from Promega, he said.

“Promega asked the court to block our ability to go forward to obtain substantial monetary damages in the millions of dollars from Promega for this alleged theft of our intellectual property and the inducement of our customers to break their contracts,” Davis said. “The judge yesterday rejected Promega’s effort to block our going forward in that lawsuit, so starting today we are going to vigorously prosecute our claims against Promega for interfering with our customer relationships.”

Late in the day, Promega issued a strongly worded statement emphasizing the unenforcability of the ‘818 patent, as well as Roche’s alleged inequitable conduct. “This decision upholds the integrity of scientific innovation,” Randall Dimond, vice president and chief technical officer of Promega, said in the statement. “Over a decade of legal obstacles couldn’t hide the fact that the US Patent Office was deceived by intentional misrepresentation and outright fabrication to gain an economic monopoly. The decision is unequivocal and definitive. It goes beyond simply clearing Promega, as it means that scientists have been burdened with undue royalty costs in the purchase of Taq.”

Promega also said it was invited by the court to submit further evidence on the enforceability of the ‘195 and ‘202 PCR patents.


Twenty Months After Chandler’s Departure, Luminex Names Abbott Dx Veteran as CEO

After nearly two years of being run by an interim CEO, Luminex has named a permanent leader.

The company has appointed Abbott veteran Patrick Balthrop as CEO and president, filling the two top spots at Luminex that were being overseen by Thomas Erickson, a professional interim president.

Balthrop comes to Luminex from Fisher Scientific International, where he was president of the Fisher Healthcare division since 2002. He has also been head of worldwide commercial diagnostics operations at Abbott Diagnostics.

Balthrop was appointed 20 months after Luminex’s CEO Mark Chandler left the company to head a spin-off based on the company’s Rules-Based Medicine project. Luminex expects Balthorp to become a company director, the company said.

Erickson will remain as a company director and chairman of the executive committee, subject to his election to the board during the company’s annual meeting of stockholders May 20.

To sweeten the deal for Balthorp, Luminex gave him a restricted stock grant for 200,000 shares of common stock at $9.36 per share, and a contractual option grant to buy 500,000 shares of common stock.

Luminex developed its Rules-Based Medicine program, also known as RBM, to map and measure proteins associated with various diseases using an array of markers on the xMap technology.


Lynx Signs, Renews Contracts for MPSS Gene-Expression Service …

Lynx Therapeutics signed three new contracts and renewed two others for its Massively Parallel Signature Sequencing gene expression-analysis service, the company said last week.

Under a new contract with the US National Cancer Institute, Lynx will use the MPSS platform to identify chromosomal reconfigurations in cancer.

In addition, under a new agreement with the US National Center for Toxicogenomics of the National Institute of Environmental and Health Sciences, the company will characterize gene expression in hepatic and blood samples from rats treated with various doses of acetaminophen.

Lastly, under a new agreement with the Berkeley Drosophila Genome Project and scientists from the Howard Hughes Medical Institute, Lynx will analyze gene expression in different tissues and developmental stages of Drosophila.

Separately, Lynx said it renewed an existing contract with the Ludwig Institute for Cancer Research to continue work that began in 2002 with NCI to characterize gene expression in cancer. The company also extended an existing agreement with the National Institute of Aging to study stem cell gene expression.


… and Posts Fall Off in Q1 Revenue, Flat Net Losses

Lynx Therapeutics reported sharply reduced revenues and flat losses for the first quarter.

Revenues for the three months ended March 31 fell to $1.3 million from $3.3 million during the first quarter last year.

R&D spending also declined, to $2.5 million from $3.6 million in the year-ago period, as the company posted relatively flat net loss of $4.2 million, or $.66 per share, compared with $4 million, or $.85 per share, during the same period last year.

As of March 31, Lynx had cash and cash equivalents of $5.6 million.


Genaissance Posts Uptick in Q1 Revenues, Flat Net Loss

Genaissance Pharmaceuticals reported a 74-percent increase in first-quarter revenues, while its losses remained flat and R&D spending increased slightly, the company said last week.

For the three months ended March 31, the company reported $3.7 million in revenue, up from $2.1 million in the year-ago period.

Genaissance’s net loss for the first quarter was $4.8 million, or $.21 per share, compared to $4.7 million, or $.21 per share, year over year.

The company spent $5 million on R&D during the first quarter of 2004, up from $4.7 million in the same period of 2003.

Genaissance had cash, cash equivalents, and marketable securities totaling $11.4 million as of March 31, compared to $16.8 million as of Dec. 31, 2003.

Genaissance said it expects to generate “in excess” of $25 million in revenue for the remainder of the year, with a net loss of between $14 million and $15 million. The strong growth is expected be due to the company’s acquisition of Lark Technologies April 2.

Kevin Rakin, president and CEO of Genaissance, said the company expects to launch its first molecular test, Familion, for cardiac ion channel mutations, later this month.


Transgenomic Posts Drop in Q1 Revenue, Widened Losses

Transgenomic last week reported a drop in first-quarter revenue amid widening net losses and reduced R&D spending.

Total receipts for the period ended March 31 fell 9 percent to $8.6 million from $9.5 million in the first quarter of 2004. CEO Collin D’Silva said revenue from sales of bioconsumables during the quarter increased 35 percent year over year

Net loss for the quarter inched up to $3.9 million, or $.13 per share, from $3.6 million, or $.15 per share, year over year, and included a non-cash finance charge of $503,000. First-quarter 2003 losses included a $4.8 million impairment charge.

The company said its Boulder, Colo.-based specialty oligonucleotide manufacturing facility, which generated $679,000 in revenues and incurred $1.5 million of manufacturing expenses during the quarter, had a particularly negative impact on its bottom line.

Transgenomic’s R&D spending was $1.9 million during the first quarter of 2004, down from $2.3 million in the prior-year period.

The company shored up its cash position by $1.3 million during the quarter, which it closed with $2.5 million of cash, cash equivalents, and short-term investments on hand. As of Dec. 31, 2003, Transgenomic had $1.2 million in cash, cash equivalents, and short-term investments.

Mitch Murphy, Transgenomic’s Interim CFO, predicted revenues in the range of $9 million to $9.5 million for the second quarter of 2004, adding, “we continue to monitor our expenses and will look for opportunities to continue to achieve incremental reductions.”


Interleukin Genetics’ Revenue, Cash Position in Q1 Reflects Early Success of Amway Collaboration

Interleukin Genetics last week posted a dramatic increase in total revenue and a much stronger cash position as its life-saving collaboration with a unit of vertical-marketing giant Amway, signed last year, begins to take root [see 9/11/2003 PGx Reporter].

Total receipts for the period ended March 31 surged to $645,000 from $28,738 one year ago, according to Interleukin Genetics. The increase is due to a $2 million milestone payment related to an agreement Interleukin Genetics signed with Access Business Group International to distribute certain DNA-based tests that help determine the risk for developing osteoporosis-related bone fractures.

ABGI is a division of Alticor, which is the parent company of Amway.

First-quarter R&D spending, however, fell to $381,260 from $872,439 year over year. As a result, net loss during the first quarter narrowed to $928,962, or $.04 per share, from $1.7 million, or $.07 per share, in the year-ago period.

Interleukin Genetics had around $6.5 million in cash, equivalents, and marketable securities as of March 31. It had $4.8 million as of Dec. 31, 2003. The increase in cash was also related to the $2 million milestone payment from ABGI.


GenoMed Taps McGill University, Genome Quebec Innovation Center for SNP Screening

GenoMed will pay CA$1.2 million ($863,000) to McGill University and the Genome Quebec Innovation Center in exchange for genotyping an undisclosed number of SNPs.

The service, which will be performed on Illumina’s genotyping platform, will try to screen between 10,000 and 30,000 SNPs at a time, according to David Moskowitz, chairman and CEO of GenoMed.

Moskowitz told GenomeWeb News, Pharmacogenomics Reporter’s sister publication, that GenoMed is seeking a variety of cancer predisposition genes, and said the screening process should take approximately four months.

After that, the company will seek a service provider to validate any hits discovered in the screening.


Nuvelo, Orchid Land on Nasdaq’s Biotech Index

Nuvelo and Orchid Biosciences were among 26 securities added to the Nasdaq Biotechnology Index earlier this week.

The change in the index will become effective with the market opens May 24.

The Nasdaq stock market re-ranks the index every May and November based on minimum requirements for market value, average daily share volume, and other criteria.

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