The Telegraph
Since 1st March, 1999
Email This PagePrint This Page
J&J to pay $ 150 m in Amgen licence suit

New York, Oct. 19: An arbitrator ordered Johnson & Johnson on Friday to pay Amgen $ 150 million for violating terms of a licensing agreement. But the arbitrator denied a request by Amgen to terminate Johnson & Johnson’s right to sell the anaemia treatment that is Johnson & Johnson’s top-selling drug.

The ruling, by a former federal judge, Frank McGarr, is the latest in a long dispute between the companies over erythropoietin, or EPO, the most lucrative drug ever produced by the biotechnology industry. It is sold by Amgen as Epogen and by Johnson & Johnson in the United States as Procrit.

Despite being fined, Johnson & Johnson hailed the decision because it will retain the rights to Procrit, which accounted for $ 2.3 billion in sales last year. Besides seeking to terminate the contract, Amgen had sought $ 1.2 billion in damages.

“In rejecting Amgen’s effort to terminate our licence, Judge McGarr has sustained our long-established position and belief in our performance under this agreement,” a spokesman for Johnson, Jeffrey J. Leebaw, said. The company said it would pay the fine and reduce its reported earnings of 60 cents a share for the third quarter by 3 cents.

Amgen also declared victory, saying Judge McGarr had characterised Johnson & Johnson’s conduct—selling the drug for kidney dialysis patients, a market reserved for Amgen—as egregious and indefensible.

“We are gratified that the arbitrator ruled in our favour and vindicated our serious concerns about Johnson & Johnson’s wrongful activities,” Amgen’s chief executive, Kevin Sharer, said in a statement.

Amgen developed EPO, a protein that stimulates the making of oxygen-carrying red blood cells. But as a struggling start-up in 1985, it licensed to Johnson & Johnson the rights to sell the drug in the United States for all uses except treating kidney dialysis patients. The biggest of these other uses is to treat anaemia induced by chemotherapy.

In a separate agreement, it also gave Johnson & Johnson the rights to sell the drug for all uses overseas. Johnson & Johnson sells the drug overseas as Eprex, but those sales were not an issue in the arbitration.

But the relationship has been stormy, with each charging the other with invading its turf, and there have been several rulings.

Email This PagePrint This Page