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Executive Summary

WELLCOME FOUNDATION DROPS TPA LICENSING AGREEMENT with Genetics Institute on May 9, citing failure to uphold its patent position in court and adverse clinical results, the companies announced in separate May 10 press releases. "Wellcome Foundation, has terminated its development plans for the clot dissolving drug candidates TPA and NPA [novel plasminogen activator] in view of a recent jury verdict involving patent rights and recent clinical data relating to TPA," the Genetics Institute release states. Wellcome and Genetics Institute lost their patent battle against Genentech for TPA after a Delaware Federal Court jury upheld the validity and enforceability of the Genentech's TPA patent in an April 6 decision ("The Pink Sheet" April 9, "In Brief"). Genetics Institute has requested that the judge in the case reverse the jury verdict. However, the judge recently informed Genetics Institute that a ruling would not issue before September 1990. The loss of marketing partner Wellcome as a result of the court decision is the second major blow to Genetics Institute in the last month. The company and its marketing partner Chugai were unable to convince a federal circuit court in April to uphold a lower court injunction against Amgen which would have paved the way for FDA approval of their EPO product Marogen ("The Pink Sheet" April 23, T&G-12). Genetics Institute and Chugai have appealed that decision. Wellcome said its decision to terminate the TPA and NPA agreement was also based on results of the 20,000 patient mortality trial GISSI-2 that were reported in March ("The Pink Sheet" March 12, T&G-5). That study found that mortality rates of patients treated with TPA (Genentech's Activase) were not significantly different from treatment with the older, lower cost streptokinase. "We are naturally disappointed that Wellcome had to make this decision with respect to TPA and NPA in light of the hard work and scientific achievements that Genetics Institute personnel have contributed to their development," Genetics Institute President and CEO Gabriel Schmergel said. Genetics Institute and Wellcome have been collaborating in the development of TPA since 1984 and NPA since December 1989. "The financial effect of the NPA decision will be reduction in expected 1990 revenues of as much as $5 mil.," Genetics Institute Senior VP-Finance and Administration Garen Bohlin said. The revenues were to have derived from licensing and manufacturing payments by Wellcome, which had licensed manufacturing and marketing rights for NPA for Europe and North America. Genetics Institute said that it will go ahead with development of NPA for the Far East under an agreement with the Japanese company Suntory. The company said that it will re-evaluate whether or not to develop the drug for the European market. In an apparent attempt to exercise some damage control, Genetics Institute released information that it will be announcing on May 21 a licensing agreement with a Japanese company for its bone growth factor bone morphogenic protein (BMP), which is in preclinical development. In its release, Wellcome announced that it is stepping up development of its human alpha n-1 interferon Wellferon for the treatment of hepatitis. Wellferon is currently marketed outside the U.S. for minor indications such as hairy cell leukemia. Already produced in Japan by Sumitomo and at Wellcome's Spanish plant, the company said that Wellferon will also be manufactured at Wellcome and Genetics Institute's joint WellGen facility in West Greenwich, Rhode Island, which was to be used for the production of TPA and NPA. "Capacity at WellGen for Wellferon manufacture can be made available because of the decision to terminate development of TPA and NPA," Wellcome remarked. Product License Applications for Wellferon have been pending at FDA since 1988 for the treatment of hairy cell leukemia and the treatment of human papillomavirus (HPV) in patients with severe resistant/recurrent respiratory (laryngeal) papilomatosis. Wellferon is in Phase III testing for Kaposi's sarcoma and Phase I trials have begun with the interferon in combination with Retrovir (AZT) for the treatment of Kaposi's Sarcoma and HIV infection.

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