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Correlogic Sells AGP Limited Rights to OvaCheck Patents in Asia as Part of Legal Settlement


By Adam Bonislawski

Correlogic Systems and Korean drugmaker Ahn-Gook Pharmaceutical have reached a settlement regarding their dispute over OvaCheck, Correlogic's protein biomarker-based ovarian cancer diagnostic.

Under the terms of the agreement, Correlogic will sell to AGP patent rights related to the OvaCheck test in Korea, China, Japan, Malaysia, and Singapore in exchange for $80,000, enabling AGP potentially to bring an ovarian cancer diagnostic based on OvaCheck's eight-protein-biomarker panel to market in those countries.

According to CEO Peter Levine, although Correlogic "unequivocally believes" that AGP had no case in their claim against them, the company is currently "in negotiations that are very important" and settling is "the right strategic move for us."

The dispute between the two firms began in November 2010 when AGP sued Correlogic in US Bankruptcy Court in the District of Maryland, claiming that Correlogic had defaulted on a loan agreement between the two companies by making material misrepresentations regarding OvaCheck (PM 11/19/2010).

According to AGP's suit, the terms of the loan agreement called for Correlogic to grant AGP an exclusive license to "unconditionally use Correlogic's intellectual property, and any and all applications thereof, in Asia, including but not limited to Korea, Japan, China, Singapore, the Philippines, Thailand, Malaysia, Vietnam, Taiwan, and Indonesia," in the event of default.

In January, a bankruptcy court granted a motion by Correlogic to reject any and all licenses asserted by AGP (PM 01/21/2011). At that time the case was to have gone to trial on Feb. 16.

In addition to selling certain patent rights, Correlogic agreed under the settlement to arrange for a meeting with biomarker discovery firm Rules-Based Medicine, which uses its immunoassay platform to run samples for the OvaCheck test. It also agreed to provide AGP with a copy of its 510(k) US Food and Drug Administration submission for OvaCheck, which AGP will be permitted to use internally to prepare regulatory submissions for the countries where it holds patent rights to the OvaCheck protein panel.

AGP's patent rights cover the OvaCheck test as it existed on July 16, 2010 and do not include any subsequent improvements to the test. Levine declined to say what, if any, improvements Correlogic had made to the test since then.

Under the settlement, Correlogic still owes AGP the $750,000 it borrowed under the companies' original loan agreement. However, as Correlogic is currently in Chapter 11 bankruptcy protection, repayment of that loan will depend on the firm's reorganization plan.

Correlogic filed for bankruptcy protection this July after almost a decade of struggle to pass OvaCheck through FDA. It filed a 510(k) application for OvaCheck with FDA in December of 2008 but withdrew it in April 2010 after being told that the patient population used in the clinical trial for the test was not satisfactory.

The company had been working on the "second arm" of the trial, which involves patient populations being treated by non-specialists, in hopes of filing another 510(k) submission upon its completion, but that work has "been on hold for the last several months pending financing," Levine told ProteoMonitor.

Have topics you'd like to see covered in ProteoMonitor? Contact the editor at abonislawski [at] genomeweb [.] com.

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