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Inex Countersues Protiva, Returning Fire in Battle Over Rights to Delivery Technology

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Inex Pharmaceuticals last week fired back against one-time subsidiary Protiva Biotherapeutics in a legal dispute over the rights to an drug-delivery technology. In a countersuit filed in the Supreme Court of British Columbia Inex claims that Protiva had limited rights to the delivery technology and was obligated to license back to Inex any improvements made to it.

"We believe Protiva has been working in an area of technology that they do not have rights to," Timothy Ruane, president and CEO of Inex, said in a statement. "We intend to vigorously defend our rights with respect to our technology for the delivery of oligonucleotides, including siRNA."

As RNAi News reported in March, Protiva filed individual suits against Inex and erstwhile collaborator Sirna Therapeutics, alleging that each company engaged in improper activities that undermined Protiva's ownership of the drug-delivery technology in question (see RNAi News, 3/30/2006).

In the countersuit, Inex states that Protiva's rights to the technology are limited to gene therapy applications wherein proteins are expressed, and that rights to its use with technologies designed to knock down proteins, including RNAi interference, remain with Inex.

Despite Inex's latest legal maneuver, it appears to be business as usual for Protiva. This week at Gene Expression System's RNAi 2006 Boston meeting in Waltham, Mass., Protiva President and CEO Mark Murray provided an overview of his company's delivery technology and its use with siRNAs.


"We believe Protiva has been working in an area of technology that they do not have rights to. We intend to vigorously defend our rights with respect to our technology for the delivery of oligonucleotides, including siRNA."

The lawsuits are a "distraction [and] affect our business," Murray told RNAi News on the sidelines of the conference. However, the company is still actively pursuing collaborations in the RNAi field, he added.

At the center of the Inex/Protiva legal battle is a technology Protiva has termed SNALPs. These are essentially nucleic acids encapsulated by cationic and fusogenic lipids, which are surrounded by a polyethylene glycol coating to prevent clearance of the positively charged cationic lipid from the bloodstream.

In 2001, Protiva was spun out of Inex to develop a gene-delivery technology for cancer and inflammatory diseases. According to a press release issued by Inex at the time, the company signed a licensing agreement transferring to Protiva "all assets relating to its proprietary gene-delivery technology."

Protiva developed that technology into SNALPs, and by mid- to late-2003 was actively shopping it to potential licensees for RNAi therapeutic applications (see RNAi News, 11/7/2003). Less than two years later, Protiva inked a deal giving Sirna Therapeutics the rights to the SNALP technology for certain of its drug candidates, including a hepatitis C therapy.

But earlier this year that relationship fell apart after Sirna decided to move forward with its own nanoparticle delivery technology and sued Protiva, alleging that the company did not control the intellectual property required to have signed the licensing agreement (see RNAi News, 3/2/2006).

According to Sirna, that IP remains with Inex • a contention seemingly supported by the actions of rival Alnylam Pharmaceuticals, which earlier this year obtained an option to exclusively license from Inex a liposomal-based drug-delivery technology that is very similar to Protiva's SNALPs (see RNAi News, 3/30/2006). Interestingly, Alnylam signed the deal with Inex shortly after publishing data with Protiva researchers supporting the use of SNALPs for systemic RNAi applications.

A few weeks after the split with Sirna, Protiva responded with lawsuits of its own (see RNAi News, 3/30/2006). One charged Sirna with maintaining a "hidden agenda" throughout the companies' collaboration to develop its own nanoparticle delivery technology based on Protiva's proprietary technologies. The other alleges that Inex and certain of its directors, hoping to overcome a setback with the US Food and Drug Administration, sought to lure away potential licensees, including Alnylam, by claiming that it, not Protiva, owns the SNALP technology for RNAi applications.

But in its countersuit last week, Inex denied Protiva's claims, maintaining that when Protiva was formed it received technology and assets from Inex "for use in the narrow area of protein expression (or gene therapy). Inex never relinquished the rights to use its delivery technology in all other areas, including the areas of protein knockdown."


Inex "had already been conducting research on the use of nucleic acids to cause protein expression and protein knockdown. … In its agreements with Protiva, Inex was seeking to broadly protect not only its then-current area of drug development but also its rights to pursue the development of other nucleic acid-based drugs unhindered by Protiva."

Inex noted that the companies' agreement defines Inex's field of operation as covering technologies for "delivering small molecule drugs or oligonucleotides other than plasmids or other expressible nucleic acid constructs." Protiva's field of operation, on the other hand, is defined as covering technologies for "delivering plasmids or other expressible nucleic acid constructs … intended to express proteins, peptides, or nucleic acids."

Inex cited several e-mails sent between members of its management team and Protiva's Murray as evidence that Protiva was aware there was a disagreement over which company owned the delivery technology in RNAi months before the FDA decided not to approval Inex's cancer drug Marqibo in January 2005 • the regulatory setback Protiva cites as a key trigger of Inex's efforts to take the SNALP technology for itself.

Among these e-mails is one from August 2004 in which Inex Director David Main wrote to Murray that "Protiva was not granted a license to any relevant Inex IP for siRNA • this was explicit in the original agreement" between the firms.

Inex also stated in its countersuit that its technology-transfer deal with Protiva in 2001 indicates that should Protiva or one of its collaborators make "any improvement" to technology covered by the patents licensed from Inex, "Protiva is to assign those improvements to … Inex." In exchange, Protiva would have an exclusive license to the improvements in the gene-therapy field.

Inex further stated that Protiva's SNALPs are simply an "improvement" over the delivery technology it acquired when it was spun out of Inex. To support its claim, Inex cited several e-mails from Protiva's Murray in which he acknowledged that the SNALP technology is similar to the technology acquired from Inex.

According to Inex, in one such e-mail, dated Oct. 22, 2003, Murray states that Protiva researchers "have developed a new application of [the delivery technology licensed from Inex] in a field called RNA interference."

But even if the SNALP technology is found to be innovative and not simply an improvement on Inex's existing technology, Inex claims that it still owns all rights in the RNAi field. According to the company, its spin-out agreement with Protiva states that any new inventions made by Protiva during a non-compete period (Jan. 18, 2001 until Jan. 18, 2004) that fall outside of the protein expression/gene therapy field as defined by the agreement will be exclusively licensed to Inex.

According to Inex's countersuit, siRNAs were shown to function in mammalian cells long before Protiva was formed, by which time Inex "had already been conducting research on the use of nucleic acids to cause protein expression and protein knockdown. … In its agreements with Protiva, Inex was seeking to broadly protect not only its then-current area of drug development but also its rights to pursue the development of other nucleic acid-based drugs unhindered by Protiva."

Inex also points out that in its deal with Sirna, Protiva agreed that a portion of the licensing fee it was owed would be held in escrow until it expanded its licensing arrangement with Inex to include siRNAs.

By this fact, "Protiva has already acknowledged and admitted that [it] considers siRNAs to be oligonucleotides and therefore subject to the terms of the improvement and non-competition provisions" of its 2001 spin-out agreement, Inex said.

"Any losses suffered by Protiva, which are denied, were not caused by any acts or omissions of [Inex or its directors], but were the results of its own actions, namely the failure to secure appropriate license rights before embarking on a product development plan that sought to trample on Inex's contractual and intellectual property rights," Inex concludes in its countersuit.

Inex is seeking a dismissal of Protiva's charges.

Murray declined to comment on the lawsuit or whether Protiva is engaged in out-of-court negotiations to settle the disputes. Inex officials also declined to comment.

• Doug Macron ([email protected])

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