MoAb licensing dispute heats up

September 11, 1991

Two monoclonal antibody imaging agent developers may slug it outin court just as their products are closing in on Food and DrugAdministration market approval. No monoclonal-based imaging agenthas been FDA-approved as yet. NeoRx filed suit against

Two monoclonal antibody imaging agent developers may slug it outin court just as their products are closing in on Food and DrugAdministration market approval. No monoclonal-based imaging agenthas been FDA-approved as yet.

NeoRx filed suit against Immunomedics in July, charging breachof contract and patent infringement. The dispute involves twotypes of radionuclide labeling technologies and patents held byboth firms.

Seattle-based NeoRx has licensed broad labeling patents issuedto Immunomedics of Warren, NJ, a decade ago for use with NeoRx'smelanoma imaging agent.

NeoRx signed the licensing deal in 1988 while in the midstof a public offering, said Robert M. Littauer, vice presidentand CFO. It took the license--even though its attorneys questionedthe strength of the Immunomedics patent--to avoid financing problems,he said.

NeoRx claims the licensing agreement allowed it the optionto sign similar licenses with Immunomedics for other products.When it discussed licensing the labeling patents for its small-celllung cancer agent with Immunomedics, however, the two were notable to come to an agreement.

NeoRx claims Immunomedics raised new issues not included inthe original license agreement and is in breach of that contract.Immunomedics contends the wording of the 1988 contract specificallyallows it to raise other conditions for the licensing of a secondagent, said Amy Factor, vice president of finance.

Immunomedics was itself in the midst of a public offeringof 2.2 million shares of common stock in July when NeoRx madeits unilateral legal move, she said. The firm was able to successfullycomplete the offering despite the suit, however. Its attorneysbelieve NeoRx does not have a legal leg to stand on. Immunomedicsis in the process of responding to the questions raised in thesuit, she said.

The NeoRx melanoma agent uses a ligand-based technology toattach technetium to the antibody. NeoRx's infringement claiminvolves patents on direct labeling technology that the firm hasnot actually put into practice. This patent was granted in 1989.NeoRx has no licensing agreements with other firms on the directlabeling patent, Littauer said.

Immunomedics does use direct attachment in its cancer imagingagent. The firm filed for a patent on its method in 1988 (SCAN6/22/88), but the patent has not yet been issued, Factor said.Immunomedics' attorneys believe there is no basis for the infringementclaim, she said.

If push comes to shove, NeoRx could dispute the general labelingpatents it licensed from Immunomedics, Littauer said.

"They are very general patents," he said. "Wereceived opinions from patent firms that the patents are not validand, even if they were, we do not infringe."

But Immunomedics has licensed these patents to Centocor andPharmos as well as NeoRx, Factor said.

"If the patents are not valid, why are they (NeoRx) comingto us again for the small-cell agent?" she asked.

Litigation could cost as much as $1 million, and NeoRx wouldrather sign a cross-licensing deal to avoid this expense, Littauersaid.

Immunomedics is not eager to incur legal costs either, butbelieves it is being attacked unjustly, Factor said.