Sonus inks deal with Nycomed to head off future patent disputes

October 13, 1999

Agreement includes cross-licensing, royalty paymentsThe ultrasound contrast agent market, long plagued by rancorous patent conflicts, was characterized by the spirit of cooperation last month. Sonus Pharmaceuticals and Nycomed Amersham have signed

Agreement includes cross-licensing, royalty payments

The ultrasound contrast agent market, long plagued by rancorous patent conflicts, was characterized by the spirit of cooperation last month. Sonus Pharmaceuticals and Nycomed Amersham have signed a cross-licensing agreement and will pay each other royalties on future sales of their agents. Nycomed also paid Sonus $10 million up front for a license fee.

Sonus and Nycomed were involved, along with Bracco, in a three-way patent interference conflict with the U.S. Patent and Trademark Office over ultrasound contrast agents. The new agreement will eliminate the possibility of future litigation between the two companies, said Sonus president and CEO Michael Martino.

“Over the last few years, many industry observers have expressed concern that the ultrasound contrast agent landscape appeared to be a minefield, and that companies would become overly focused on patent disputes rather than development of the marketplace,” he said. “This frees us to really focus on the development of the exciting potential for ultrasound contrast agents.”

Nycomed also views the deal as a way to avoid potentially time-consuming and expensive litigation with Sonus, as well as to strengthen its patent position in the ultrasound field, according to a Nycomed spokesperson.

Sonus will receive a nonexclusive worldwide license to Nycomed’s patent claims related to perfluoropentane. For Nycomed, the agreement gave the Buckingham, U.K.-based firm exclusive access to all Sonus ultrasound patents, with the exception of perfluoropentane-based contrast media employed by Sonus in its EchoGen agent. Nycomed is also free to sublicense the patents. The exclusive agreement covers all markets except for the Pacific Rim, where Nycomed will receive a nonexclusive license.

Nycomed submitted a new drug application (NDA) to the Food and Drug Administration for its ultrasound contrast agent Sonazoid in August (SCAN 8/18/99).

In addition, the deal calls for Nycomed to be actively engaged in enforcement of patent rights they’ve licensed from Sonus, including any litigation and its costs, Martino said.

While Nycomed and Sonus have resolved all patent-related disputes between themselves, each firm remains in separate litigation with Molecular Biosystems and its marketing partner Mallinckrodt.

In other Sonus news, the Bothell, WA-based company announced that it has filed a formal response to the conditional approval letter for EchoGen it received in April from the FDA (SCAN 4/28/99). The FDA has notified Sonus that its response has been accepted as complete for review. While optimistic, the company declined to speculate on the timing and ultimate outcome of the agency’s review.

Meanwhile, Sonus’s efforts in Europe continue to move forward. The company has made progress toward obtaining final approval for the EchoGen marketing license in Europe that will enable them to launch the product in the European Union, according to Sonus. Approval for two of the three required manufacturing variations submitted to the European Commission were obtained in the second quarter of 1999, and the company expects regulatory action on the third variation by the end of this year.

As the firm edges closer to final European approval, the company has reevaluated its marketing strategies outside the U.S. Sonus is in discussions with marketing partner Abbott International, the international division of Abbott Laboratories, to renegotiate their agreement and substantially reduce Abbott International’s responsibilities.

“Abbott International and Sonus agreed that it was in our best interest to find partners in certain territories that would have EchoGen as a focus, and would do the job we think needs to be done to create and penetrate the market,” Martino said.

Agreements between Sonus and Abbott for manufacturing and for U.S. sales and marketing are separate deals, and are unaffected by the renegotiations, Martino said.

Sonus also announced that Steven Quay’s post as chairman of Sonus has been assumed by co-chairs George Dunbar and Robert Ivy. Quay will retain responsibilities at Sonus, assisting the firm with intellectual property matters.