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ERBAMONT WILL SUPPLY CETUS WITH DOXORUBICIN

Executive Summary

ERBAMONT WILL SUPPLY CETUS WITH DOXORUBICIN liquid and powder under a settlement agreement announced April 15. The settlement -- the terms of which were not disclosed -- ends a long-running legal and patent dispute between Erbamont and Cetus joint venture Cetus- Ben Venue over the sale of liquid and powdered generic forms of the anticancer drug. Erbamont's U.S. subsidiary Adria Labs, which discovered and developed doxorubicin, markets the drug under the Adriamycin brand. Erbamont's process patent expired in April 1991. Cetus-Ben Venue has been without a supplier of bulk generic doxorubicin since the September seizure of Italian supplier SICOR SpA's Milan doxorubicin facility following charges by Erbamont of industrial espionage ("The Pink Sheet" Oct. 1, T&G-3). Until the agreement, Cetus-Ben Venue had been relying on its inventory of the cancer drug while searching for a new supplier. The settlement includes a royalty-bearing license to Cetus-Ben Venue Therapeutics for Erbamont's U.S. patent for ready-to-use solutions of doxorubicin. The licensing agreement will render moot a suit filed by Erbamont in Ohio federal court on Aug. 31 last year that charged Cetus-Ben Venue with infringing the company's patent for ready-to-use liquid doxorubicin. Erbamont was issued a U.S. patent for the liquid doxorubicin on Aug. 7, 1990. A key to the timing of the settlement may have been the hearing on Erbamont's suit that was scheduled for April 29. Cetus-Ben Venue has been the sole marketer of generic liquid doxorubicin in the U.S. The solution form of the antitumor agent makes up about 70% of the doxorubicin U.S. market, with sales of approximately $ 100 mil. annually. The settlement also ends an earlier dispute over Cetus-Ben Venue's and Bristol-Myers Squibb's importation of bulk generic doxorubicin for the powder form of the anticancer drug. In May 1990, an International Trade Commission administrative law judge ruled that the U.S. sale of the powdered form of the product by Cetus-Ben Venue and Bristol-Myers Squibb did not infringe Erbamont's process patent ("The Pink Sheet" May 28, T&G-14). The ITC upheld that ruling in October. Following the expiration of doxorubicin's product patent in June 1988, Cetus-Ben Venue was the first company to get a generic version of the drug on the market in the U.S. ("The Pink Sheet" March 27, 1989, T&G-14). SICOR had received the first ANDA approval for bulk generic doxorubicin in December 1988. The two companies also reported that they have a letter-of- intent agreement under which Erbamont subsidiary Farmitalia Carlo Erba will supply doxorubicin to Cetus' European subsidiary EuroCetus BV.

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