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Merck Takes License to Protiva Tech to Settle Litigation Inherited from Sirna

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Sirna Therapeutics, a subsidiary of Merck, and Protiva Biotherapeutics have settled their year-and-a-half old legal battle over a scuttled licensing deal for an siRNA delivery technology.
 
As part of the settlement, Merck has taken a non-exclusive license to the Protiva delivery technology. In exchange, Protiva will receive an undisclosed one-time payment and potential milestones and royalties, the companies said this week.
 
According to a filing with the US District Court for the Northern District of California, the agreement reached by the companies “fully settles all contested issues,” and each company has agreed to dismiss its claims against the other and assume its own legal costs.
 
A similar filing was made in a related case in a California Superior Court.
 
With the settlement of the Protiva litigation, Sirna is now released from court-imposed limits on its ability to develop siRNA-based drugs against targets that had not been covered in its original agreement with Protiva — a situation that may in part explain Merck’s silence on Sirna’s pipeline since it acquired the RNAi drug company earlier this year.
 
“We are pleased to have licensed Protiva's … technology,” Alan Sachs, vice president of RNA therapeutics at Merck, said in a press release jointly issued by both companies. "This technology can now be used to advance Merck's RNAi-based therapeutic development programs."
 
Calling the licensing deal with Merck a “validation” of Protiva’s position in the siRNA delivery space, Protiva President and CEO Mark Murray added in the press release that his company is “moving forward with financial strength and a continued focus on the development of new therapeutic products and business alliances.”
 
Still, the battle isn’t over for Protiva. The company is still embroiled in ongoing litigation with Tekmira Pharmaceuticals — which was recently spun out from one-time Protiva parent company Inex Pharmaceuticals — over the same delivery technology that was at the heart of the Sirna dispute.
 
In a statement released this week, Tekmira said that it plans to amend its suit against Protiva, which was filed in a Canadian Superior Court, to include “a claim on any and all consideration received by Protiva in connection with the licensing of the disputed technology. This includes upfront or one-time payments as well as future milestones and royalties.”
 
Tekmira said it will also seek a court ruling that will “effectively terminate Merck’s license to the disputed technology.” It is unclear how a ruling by a Canadian court will affect the research and development activities of Merck, a US company.
 
“As rightful owners of the disputed technology, we will continue to defend our contractual and legal position against Protiva and any of its current or future licensees, including Merck,” Tekmira President and CEO Tim Ruane said in the statement. “We are confident in our position and we will continue our focus on bringing resolution to this dispute for the benefit of Tekmira and its shareholders, whether through the courts or other mechanisms.”
 
Tekmira officials were not available for additional comment.
 
SNALP Spat
 
In 2005, Sirna licensed Protiva’s so-called SNALP, or stable nucleic acid lipid particle, technology, which essentially comprises a nucleic acid encapsulated by cationic and fusogenic lipids, all of which are surrounded by a polyethylene glycol coating.
 
SNALPs were originally developed to deliver protein-encoding plasmids, but Protiva had been shopping the technology around since at least late 2003, trying to find companies interested in licensing it for RNAi applications (see RNAi News, 11/7/2003).
 
According to court documents, that deal gave Sirna the right to use the SNALP technology to deliver RNAi-based drugs against three targets of its choice, with the first being hepatitis B/C and PTP 1B, a gene associated with insulin resistance and diabetes.
 
By the middle of 2005, Sirna was seeing promising data from experiments with SNALPs, including ones published in Nature Biotechnology demonstrating that the technology could be used to effectively deliver siRNAs against the hepatitis B virus in mice (see RNAi News, 7/29/2005).
 
Less than a year later, however, Sirna apparently had a change of heart. In January 2006, Sirna’s then president and CEO publicly disclosed that the company would use an in-house nanoparticle-based delivery technology in its lead hepatitis C program (see RNAi News, 1/19/2006).
 
As court documents would reveal, Sirna’s decision not to use SNALPs with its hepatitis C program may have been based on legal, rather than scientific, reasons.
 
In March 2006, Sirna sued Protiva in a California District Court for breach of contract and fraud, alleging that Protiva misrepresented itself as the owner of the SNALP technology when, in fact, the rights to use the technology for RNAi applications remained with Inex (see RNAi News, 3/2/2006).
 

“We are pleased to have licensed Protiva's … technology. This technology can now be used to advance Merck's RNAi-based therapeutic development programs.”

In response, Protiva filed its own suit against Sirna in a California Superior Court, charging the RNAi drug developer with maintaining a “hidden agenda” to develop its own siRNA delivery technology using Protiva's proprietary technologies and know-how (see RNAi News, 3/30/2006).
  
At the same time, Protiva sued Inex (now Tekmira) both in Canada and California for stating to people in the RNAi industry that Protiva did not control intellectual property related to the use of SNALPs for RNAi — talk that Protiva said led to the end of the deal with Sirna and damaged licensing talks with other companies including Alnylam Pharmaceuticals.
 
According to a Canadian countersuit by Tekmira (as Inex), Protiva was only granted limited rights to the SNALP technology when it was spun out of Inex and these rights do not include RNAi applications (see RNAi News, 5/4/2006).
 
By late 2006, Protiva was pushing to have the Sirna-initiated lawsuit in the District Court dismissed on grounds that its US subsidiary was a necessary party to the litigation but not specifically named as a defendant and that Sirna had failed to provide evidence of Protiva’s duplicity in negotiating the firms’ 2005 deal (see RNAi News, 9/21/2006). That request was ultimately rejected, but the case was stayed pending a decision by the Superior Court (see RNAi News, 12/7/2006.)
 
Protiva was later handed a small victory by the Superior Court when it issued a preliminary injunction barring Sirna from engaging in “product development in connection with the delivery of siRNA beyond the target areas set forth” in its 2005 agreement with Protiva, namely hepatitis B/C and PTP 1B (see RNAi News, 3/22/2007).
 
The court noted that the order was not the “sweeping injunction mandating a return of all Protiva information and, in substance, a halt to Sirna’s work in connection with the manufacture, use, and sale of [its investigational hepatitis C drug] Sirna-034” that Protiva had been seeking.
 
Still, the injunction put restraints on Sirna’s drug-development activities, though the extent of those limitations is not clear.
 
Prior to its purchase by Merck, Sirna-034 was poised to enter the clinic before the end of 2006. A permanent hair removal drug was expected to begin phase I testing through Sirna’s dermatology unit around the same time.
 
Since the acquisition (see RNAi News, 1/4/2007), however, there has been no word from Merck on the status of these or other Sirna programs.
  
Details about certain of Sirna’s partnered or out-licensed programs have trickled out: Sirna’s wet age-related macular degeneration, which was licensed to Allergan in 2005 (see RNAi News, 10/7/2005), is in phase II testing. Earlier this year, an official from Targeted Genetics, which partnered with Sirna on its Huntington’s disease program in 2005 (see RNAi News, 1/14/2005), said that their effort is progressing but not expected to enter clinical studies until 2008 (see RNAi News, 5/24/2007).
 
But as far as Sirna’s in-house drug work goes, Merck has remained tight-lipped. While it is possible that some of Sirna’s pipeline programs did not coincide with Merck’s stated interests, such as the hair removal drug, Merck has what it calls a “focused interest” on hepatitis C.
 
With the possibility that the Protiva settlement has removed the legal roadblocks to its siRNA-based hepatitis C program, Sirna-034, as well as other RNAi drugs, might begin showing up in Merck’s presentations and on its public pipeline chart, which is updated three times a year.
 
Representatives from Merck/Sirna did not return requests for further comment.
 
For Protiva, however, the issue isn’t settled just yet.
 
Early this year, Protiva dropped the lawsuit it filed against Inex (now Tekmira) in a California Superior Court (see RNAi News, 1/4/2007), but the Canadian litigation between the companies continues.
 
In response to Tekmira’s statement this week regarding the litigation, a Protiva spokesman told RNAi News that "this is nothing new. 
 
“We have been hearing the same noise from [Tekmira] for the past several years, and we continue to believe their claims are entirely without merit,” the spokesman said in an e-mail. “Tekmira's claims did not impede us from forging an alliance with Merck nor will [they] prevent us from establishing similar relationships with other industry players in the future."

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