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Tekmira Official Sees 'Resolution' to Alnylam Dispute Before Year End

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Tekmira Pharmaceuticals' CEO this week provided an update on the company's ongoing litigation with partner Alnylam Pharmaceuticals, confirming that a roughly one-year-old technology-misappropriation lawsuit could be resolved before the end of 2012.

A trial date for that case remains set for Oct. 30, Tekmira President and CEO Mark Murray said, speaking during a conference call held to discuss the firm's first-quarter financial results. “The primary document production phase was completed in the first quarter, and the deposition of witnesses, which is the next phase in the case, should be complete over the next few weeks.

“We look forward to reaching a resolution this year,” he said.

Meanwhile, a separate dispute between the companies over a US patent related to Alnylam's phase I liver cancer drug ALN-VSP recently took a turn in Tekmira's favor, Murray noted.

“This past quarter, the USPTO Board of Patent Appeals and Interference found that the broad claims of Alnylam's ... patent were not patentable,” he said.

More recently, Tekmira was notified that the US Patent and Trademark Office's Board of Patent Appeals and Interference has found the company's subsidiary, Protiva Biotherapeutics, to be the “senior party in the priority phase of this process,” Murray said. This places onto Alnylam the “burden of proof with regard to claiming temporal priority in the upcoming phase of the interference.”

The legal row between the companies began last year when Tekmira sued Alnylam for allegedly stealing trade secrets related to its proprietary lipid nanoparticle delivery technology (GSN 3/17/2011). The suit, which in part focuses on Alnylam's so-called MC3 lipids, was later expanded in a Canadian court to include Vancouver-based startup and close Alnylam collaborator AlCana Technologies.

In January, a British Columbia court granted Tekmira's request for an injunction ordering AlCana, which was founded by former Protiva employees, to return confidential documents and materials that were taken from Tekmira (GSN 1/12/2012).

“In March, we filed a second application to expand this injunction to prohibit the use of any derivative or end products derived from Tekmira's confidential information,” Murray noted this week. “Our review of the stolen documents supports our allegation that Tekmira's confidential information was used to make the lipid MC3.”

As for the ALN-VSP situation, Alnylam announced in March that the US Patent and Trademark Office had upheld certain claims within its patent, No. 7,718,629 as part of a review launched at the request of Protiva (GSN 3/15/2012).

The patent covers the use of siRNAs against ALN-VSP's target, kinesin spindle protein. Alnylam alleges that Tekmira wrongfully used its knowledge of the drug as its manufacturer to file a patent application on the specific sequence used in the compound.

Tekmira characterized the USPTO decision as its own victory, with Murray stating that the patent office “denied or deferred all four of Alnylam's motions and granted two of our three motions, including our motion that Alnylam's broad claims are unpatentable due to lack of adequate written description support.

“Alnylam's corresponding motion that Protiva's claims are unpatentable for lack of written description support was denied, as was their motion that Protiva is not entitled to priority benefit based on our provisional applications,” he added.

Based on the USPTO's determination that Protiva is the senior party in the interference proceedings, Alnylam now faces an uphill climb in asserting its ownership of the patented ALN-VSP technology.

The First Quarter

For the three-month period ended March 31, Tekmira reported a net loss of $3.2 million, or $0.25 a share, versus a year-ago loss of $3.1 million, or $0.30 per share.

Revenues in the period fell 16 percent to $3.6 million from $4.3 million in the first quarter of 2011.

Research, development, collaboration, and contract expenses dropped to $4.1 million from $5.6 million, while general and administrative costs edged up to $1.8 million from $1.5 million a year earlier. Tekmira attributed the rise in G&A expenses to the ongoing Alnylam/AlCana litigation.

At the end of the first quarter, Tekmira had $8.7 million in cash and cash equivalents.

The company said it anticipates that it current cash on hand, plus expected income, will be sufficient to finance operations into the second half of 2013.

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